Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels,  26.06.2020  
C(2020 ) 4432 final  
PUBLIC VERSION  
To the notifying party  
 
Subject : Case M. 9759 – Nexi/Intesa Sanpaolo (Merchant Acquiring business)  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 19.05.2020,  the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by whic h Nexi S.p.A . 
(“Nexi”, Italy) acquires within the meaning of Article 3(1)(b) of the Merger 
Regulation  sole control of the whole of Intesa Sanpaolo S.p.A .’s (“ISP”, Italy)  
merchant acquiring business  (“ISP Acqui ring”) (the “Transaction”).3 Nexi  is referred 
to as the “Notifying Pa rty” and, together with ISP Acqui ring, they are referred to as the 
“Parties”.  
1. THE PARTIES  
(2) Nexi  is the holding company of a group  primarily  active in Ita ly in payment services. 
Nexi  is active in the card payment systems sector in Italy and provides a full range of 
services for merchants, such as merchant acquiring  services , processing services and 
supplies  of point of sale (“ POS”) terminals and related services  via its subsidiary Nexi 
Payment  S.p.A. (“Nexi Payments”) . Other Nexi subsidiaries also provide services 
such as ATM management and digital corporate banking services.  Nexi is controlled 
by Mercury UK Holdco Limited  (“Mercury Holdco”) , which holds 52.45% of its share 
capital.  Mercury UK Holdco is in turn indirectly jointly controlled by funds managed 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation ”). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union ( “TFEU ”) has introd uced certain changes, such as the replacement of  
“Community ” by “Union ” and “common market ” by “internal market ”. The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C 180, 29.05.2020 , p. 17. 

 
 
2 by Advent International Corporation (“Advent International”) and funds managed by 
Bain Capital Investors, L.L.C. (“Bain Capital”) , both private equity investment firms . 
(3) ISP is an Italian banking group that is listed on the Italian stock exchange and is not 
controlled by any person or persons within the meaning of the EU Merger Regulation.  
ISP Acqui ring is the in -house merchant acquiring business of ISP . ISP Acqui ring 
provides merch ant acquiring services primarily in Italy an d exclusively to ISP 
customers.  More specifically, ISP Acqui ring supplies merchant acquiring services 
internally to ISP ‘s banking customers. Such services are  often bundled with other 
banking and financial servic es provided to the bank’s customers, which are the  
merchants at the retail level of the value chain.  ISP Acqui ring provides merchants with 
POS and web -enabled merchant acquiring services, as well as various types of POS 
terminal solutions.   
2. THE OPERATION  
(4) On 19 December 2019, Nexi and ISP entered into a Contribution Agreement  pursuant 
to which Nexi would acquire ISP Acquiring and designate either Nexi Payments or 
Mercury Holdco  as the purchaser of the whole of ISP Acqui ring. As a result of such 
designation,  occurred on 17 February 2020, and following the completion of the 
Transaction, Nexi, through Nexi Payments , will acquire sole control over ISP 
Acqui ring. The Transaction is therefore a concentration within the meaning of Article 
3(1)(b) of the EU Merger R egulation.  
(5) Following the closing of the Transaction, ISP separately agreed with Mercury Holdco 
to reinvest  part of the proceeds that it will receive from the sale of ISP Acqui ring in 
the purchasing a 9.9% non -controlling shareholding into Nexi  in an ancil lary 
transaction .4 The latter is merely a portfolio investment and will not confer any 
governance rights to ISP.  
(6) Pursuant to the Contribution Agreement and following the completion of the 
Transaction, the Parties will e nter into a merchant digital acceptan ce business 
                                                 
4  This minority shareholding will not create risks of coordinated behaviour in any of the markets relevant to 
the present Decision since, following the cession of its merchant acquiring di vision (ISP Acquiring) to Nexi, 
ISP will no longer be active in any of these markets (wholesale or retail merchant acquiring, the provision 
of POS terminals or acquiring processing services). In particular, this minority shareholding has no impact 
on the a ssessment of potential coordinated effects carried out by the Commission in Section 4.5.3  of this 
Decision. In addition, the Notifying  Party confirmed  in its response to the Commission’s RFI 11, dated 24 
June 2020, that this shareholding will not provide ISP with information rights different from the ones 
guaranteed to any other Nexi’s minority shareholder. The Notifying Party explains that, being a lis ted 
company, under Italian law, Nexi is subject to disclosure obligations vis-à-vis its shareholders and the 
market on a non -discriminatory basis.  As such, it appears that, through the acquisition of this minority 
shareholding, ISP will not gain access to any privileged information rights into Nexi’s activities. To this 
respect, the Commission also notes that in the course of a call with a competitor of the Parties on 17 March 
2020, the competitor of the Parties stated that: “ With regard to the remuneration  part of the Transaction, 
according to which ISP could acquire 10% of shares in Nexi, [Competitor]  considers that the stake obtained 
by ISP does not allows direct intervention of ISP in the governance of Nexi and that therefore ISP will not 
be able to exer cise significant influence on the Nexi’s activities .” 
 
 
3 agreement (the “MDAB Agreement”) and into an ancillary service agreement 
(“ASA”).5  
(7) According to the MDAB Agreement, ISP will promote Nexi’s merchant acquiring 
products and services to ISP’s [BUSINESS SECRET – STRATEGIC DECISIONS ] 
merchants . The overall duration of the relationship between ISP and Nexi is 
[BUSINESS SECRET REGARDING DURATION OF THE RELATIONSHIP]  years, 
[BUSINESS SECRET – STRATEGIC DECISIONS].  The provisions of the MDAB 
Agreement reflect the fact that the ISP Acquiring busines s, being purchased by Nexi , 
obtains all its merchant customers from referrals by ISP’s banking business, which has 
a commercial direct relationship with these merchants and provides them with a range 
of banking and other financial services. While Nexi will  take over merchant acquiring 
services, these merchants will preserve their current commercial relationship with ISP 
for the provision of all the other banking services.  
(8) Pursuant to the ASA, ISP will provide Nexi with certain services in order to allow th e 
latter to manage the merchant acquiring business transferred to it.    
3. EU DIMENSION  
(9) The undertakings concerned have a combined aggregate world -wide turnover of more 
than EUR 5 000 million  (2018 : Nexi6: EUR [BUSINESS SECRET – FINANCIAL 
INFORMATION ], ISP Ac quiring EUR [BUSINESS SECRET – FINANCIAL 
INFORMATION ]).7 Each of them has a n EU-wide turnover in excess of EUR 250 
million  (2018 : Nexi: EUR [BUSINESS SECRET – FINANCIAL INFORMATION ], ISP 
Acquiring : EUR [BUSINESS SECRET – FINANCIAL INFORMATION ]), but they do 
not achieve more than two -thirds of their aggregate EU-wide turnover within one and 
the same Member State. The notified operation therefore has an EU dimension.   
4. COMPETITIVE ASSESSMEN T 
4.1. Introduction and the Parties’ activities  
(10) The Transaction combines ISP’s in -house merchant acquiring services with Nexi, a 
payment service s provider active in Italy. In 2016, Nexi previously acquired ISP’s 
acquiring processing services , and the present Transaction is additive to that deal .8 The 
Transaction  result s in a horizontal overlap in merchant  acquiring  services . In addition, 
the Transaction will result in the creation of vertical links with respect to some related 
                                                 
5  In relation to the MDAB and the ASA, the Commission notes that pursuant to Article 6(1)b, second 
subparagraph of the Merger Regulation, a decision declaring a concentration compatible with the intern al 
market is deemed to cover restrictions directly and necessary to the implementation of the concentration, so 
called “ancillary restraints”. As a matter of principle, it is incumbent on the notifying parties to determine 
whether and to what extent agreem ents accompanying a concentration may qualify as ancillary restraints 
within the meaning of that provision. Restraints that are not covered by a decision pursuant to Article 6(1)b 
of the Merger Regulation may fall within the scope of application of antitru st rules. In this respect, the 
Commission Notice on restrictions directly related and necessary to concentrations, OJ C 56, 5.03.2005, 
p.24, provides further guidance.   
6  Nexi’s turnover includes the turnover of its parent companies, Advent International  and Bain Capital.  
7  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
8  See Case M.9073 – Advent International / Bain Capital / Setefi Services / Intesa Sanpaolo Card.  
 
 
4 activities within card payment systems. This section will therefor e provide a brief 
descriptio n of card payment systems and the affected activities.  
(11) Card payment systems available to the public allow a cardholder to use a payment 
card, such as a debit or a credit card, to pay for products and services purchased at 
stores (physical or on -line) witho ut using cash. Through these systems, the merchants 
are connected with financial institutions , namely the bank  issuing the card ( issuer  
bank) and the bank endorsing the cash -less payment to the benefit of the merchant 
(acquir er bank), to execute the entire  transaction from the moment of payment at the 
point of sale (“POS”) until the merchant’s account is credited.9 
(12) Figure 1 provides an overview of the actors and main steps in a typical card payment 
transaction.  
 
Figure 1: Overview of electronic payment transaction  
Source: Notifying Party  
(13) A card payment transaction begins when the cardholder uses a payment card to pay 
for the purchase of goods or services from a merchant. The merchant will seek 
authorisation for the transaction from its merchant acquirer. The authorisation request 
is trans mitted from the merchant’s POS terminal (card reader) in which the customer 
entered their card. Subsequently, the authorisation request is sent to the acquirer 
processor, which will identify the scheme network to which the payment card belongs 
and transmit s the request to the issuer processor. The issuer processor will perform 
checks, such as whether the card is valid and whether the card holder’s account 
contains sufficient funds. The result of the authorization request is sent back to the 
POS terminal; if  the transaction is authorised, the merchant can be sure of payment.  
(14) The setup described above can be subject to some variations across countries. A 
variety of players are active in the card payment process, such as banks, payment 
                                                 
9  See also Case M.7873 – Worldline/Equens/Paysquare  for another presentation of card payment systems.  

 
 
5 service providers (“PSPs ”), and scheme networks. In most cases, an actor is involved 
in multiple stages of the process. In the case at hand, the Parties’ activities only overlap 
horizontally in merchant acquiring, as this is the only activity in the card payment 
process that ISP Merchant acquiring carries out . Merchant acquiring can be defined 
as follows:  
(a) Merchant acquiring:  a set of services that enable merchants to accept 
payment cards at POS terminals. Merchant acquirers sign contracts with 
merchants (who are thus the customers  of merchant acquirers), maintain the 
merchant -customer relationship and ensure that merchants receive the funds 
following the card payment transactions. ISP Acquiring provides merchant 
acquiring services directly to merchants who are ISP customers.10 Nexi also 
provides merchant acquiring services directly to merchants. Internally, Nexi 
refers to this distribution channel as the Direct  model.  Moreover, under its so -
called Referral  model, Nexi provides merchant acquiring services directly to 
merchants that  have been recruited by banks in exchange for a percentage of 
the merchant fee  set by Nexi .11 Finally, under the so -called Licensing  model, 
Nexi provides merchant acquiring services to bank s, which will in turn provide 
these to merchants, possibly in conjun ction with other financial services.  In 
this mod el, Nexi negotiates and has a contractual  relationship with banks . The 
banks in turn have a commercial relationship with mercha nts and set the 
commercial terms, including the price.12 In the rest of this decis ion, this last 
type of activities will be referred to as “wholesale merchant acquiring”, and 
the Direct  and Referral  models as “retail merchant acquiring”. The present 
decision will discuss whether wholesale merchant acquiring and retail 
merchant acquiring  jointly constitute a single product market or should be 
considered as separate product markets.  
(15) In addition, other activities within the payment process are affected non -horizontally:  
(a) Acquiring processing  services : the merchant -oriented side of technical ly 
processing a transaction. This includes the network routing of payments 
towards the issuer processor and POS authorisation. Merchant acquirers can 
either provide acquiring processing in -house, or outsource it to third party 
processors. Today, ISP Acquir ing sources  acquiring processing services from 
Nexi  on an exclusive basis. Conversely,  Nexi’s acquiring processing services 
are provided almost exclusively to ISP Merchant Acquiring, for the majority 
of its other acquiring processing needs, Nexi outsources  these activities to third 
parties.13 
(b) POS terminal and related services:  the provision of POS terminals (card 
readers) to merchants, either on a rental or purchase basis, as well as related 
services such as maintenance. Today, ISP Merchant Acquiring sources it s POS 
terminals and related services exclusively from Nexi.14 
                                                 
10  Form CO, paragraph 6.  
11  Form CO, paragraph 80.  
12  Form CO, paragraph 96.  
13  Form CO, paragraph 264.  
14  Form CO, paragraph 249.  
 
 
6 (16) Finally, Ne xi is also involved in other activities related to card payment systems which 
are not affected by the Transaction, such as issuing processing services, card issuing 
ATM management and digital corporate banking services.15 
4.2. Market definitions  
(17) While the Commis sion has previously defined a separate product market for merchant 
acquiring services  (see Section  4.2.2.1 ), so far, it has not assessed the existenc e of 
separate markets for retail merchant  acquiring (to merchants) and wholesale merchant 
acquiring (to banks). The Notifying Party submits that retail merchant acquiring and 
wholesale merchant acquiring constitute two distinct product markets.16 The Notify ing 
Party’s reasoning and the Commission’s assessment in that respect will be further 
developed in Section  4.2.1 , which will focus on wholesale merchant acquiring.  
(18) The main focus of the case is merchant acquiring, which comprises a set of services 
that allow merchants to accept card -based payments. A description of merchant 
acquiring and its role in the broader card payment system is provided in Section 4.1. 
4.2.1.  Wholesale merchant acquiring  
(19) Nexi considers itself to be active in the provision of merchant acquiring services at 
wholesale level to banks. It explains that prior to 2015, Italian banks were either 
vertically integrated in the provision  of merchant acquiring services , or they sourced 
merchant acquiring services only from ICBPI , a body that included as shareholders 
several Italian cooperative banks (generally regional banks).  ICBPI was at that time 
the only organisation providing such services in Italy. In 2015, ICBPI was acquired 
by Advent International and Bain Capital,17 and subsequently rebranded to Nexi  in 
2017 . Under the terms of the deal, Nexi obtained [BUSINESS SECRET – SALES 
STRATEGY ] contracts lasting [BUSINESS SECRET – SALES STRATEGY ] years  with 
a number of banks for the provision of merchant acquiring servic es. Since this date, 
the market for wholesale merchant acquiring in Italy emerged and grew.  
(20) According to Nexi,  wholesale merchant acquiring can be described as the activity by 
which a merchant acquirer enters into contractual relationships with partner banks to 
provide them with merchant acquiring services  and POS terminals . The wholesale 
merchant acquirer  negotia tes and has a contractual relation with the partner banks , 
which  in turn have a commercial relationship  with merchants and set the commercial 
terms and  economic conditions for acquiring services. In particular, the partner banks 
retain control over the pri cing of merchant acquiring services they provide to their 
customers. As mentioned in paragraph (14), Nexi internally designates its wholesale 
activity as the Licensing model.  
                                                 
15  Form CO, paragraph 75.  
16  Form CO, paragraph 79 . 
17  See Case M.7711, Advent International/Bain Capital/ICBPI , decision of 16 September 2015.  
 
 
7 4.2.1.1. Product market definition  
Commission’s precedents  
(21) The Commission has not yet considered separate markets for retail merchant acquiring 
(to merchants) and wholesale merchant acquiring (to banks).  
The Notifying Party’s view  
(22) The Notifying Party submits that there is a distinct wholesale market for the provision 
of merchant acquiring services to banks (by PSPs), separate fr om the retail provision 
of merchant acquiring services to merchants.18 
(23) To support this statement, the Notifying Party submits that retail merchant acquiring  
and wholesale merchant acquiring are separate levels of the value chain , where 
wholesale customers ( banks) have full freedom to set the final price a nd conditions to 
their own retail customers (merchants)  without any intervention of the provider of 
wholesale merchant acquiring services in the commercial relationship between the 
bank and the merchant .19 The Notifying Party also explains that ISP does not and could 
not compete at wholesale level,20 and that combining wholesale and retail volumes 
would lead to the double counting of the volumes that were sold at wholesale level to 
banks and then resold, at ret ail level, by those same banks, to their customers.21 The 
Notifying Party also claims that since banks are sophisticated players, the customer 
base and the competitive dynamics in place at wholesale level are different from the 
ones at retail level.22 Moreov er, the Notifying Party submits that on a per -customer 
basis, wholesale transaction volumes are significantly larger than retail volumes. The 
average bank sources about EUR [BUSINESS SECRET – MARKET POSITION – 
KNOW -HOW ] million per annum in merchant acquir ing transaction value from Nexi, 
while the average merchant sources around EUR [BUSINESS SECRET – MARKET 
POSITION – KNOW -HOW ] per annum.23 In terms of pricing, the Notifying Party 
explains that prices for wholesale services are significantly lower than retail prices for 
comparable merchant books, indicating a price difference of around [20-30]%.24 
Finally, the Notifying Party submits that the  number of wholesale and retail customers 
differs substantially: Nexi has [BUSINESS SECRET – NUMBER OF CUSTOMERS ] 
wholesale customers and about [BUSINESS SECRET – NUMBER OF 
CUSTOMERS ] times as many retail customers.25 
                                                 
18  Form CO, paragraph 100 . 
19  Form CO, paragraph 101.  
20   Form CO, paragraph 102.  
21  Form CO, paragraph 103.  
22  Form CO, paragraph 104.  
23  Form CO, paragraph 231.  
24  Form CO, paragraph  231. 
25  Form CO, paragraph 231.  
 
 
8 The Commission’s assessment  
(24) The Commiss ion’s market investigation gave sufficient evidence to conclude that, in 
the Italian context, the definition of a separate product market for wholesale merchant 
acquiring is appropriate.  
(25) The majority of merchant acquirers indicated  that wholesale merchant acquiring is 
either a genuine separate market or an alternative channel of distribution for the 
wholesaler where the customer bank retains freedom in terms of pricing. When asked 
directly whether the distinction between wholesale and retail merchant acquir ing is 
relevant in Italy, a large majority indicated that the distinction is relevant.26 With 
regard to contract features between wholesale merchant acquirers and their customers, 
the large majority indicates that the contracts do not stipulate an exclusive  relationship 
and provide for pricing freedom at retail level for the bank.27 
(26) Finally, it is noteworthy that there are merchant acquiring players in Italy that are 
active in merchant acquiring exclusively on a wholesale level, such as SIA.28 
(27) In light of the above and for the purposes of the assessment of the Transaction, the 
Commission considers that wholesale merchant acquiring constitutes a separate 
product market.  
4.2.1.2. Geographic market definition  
Commission’s precedents  
(28) The Commission has not yet considered se parate markets for retail merchant acquiring 
(to merchants) and wholesale merchant acquiring (to banks). As mentioned below  in 
paragraph (46), the Com mission has considered in the past that the market for 
merchant acquiring is likely national  in scope, except for merchant acquiring services 
for payments made through web -enabled interfaces (e -commerce) which were 
considered to be at least EEA -wide . The precise scope of the geographic market 
definition was ultimately left open.  
The Notifying Party’s view  
(29) The Notifying Party submits that the relevant geographic market for wholesale 
merchant acquiring is EEA -wide, and considers that the same arguments that have 
been put forward in its claim that the relevant geographic market for retail merchant 
acquiring is EEA -wide also apply to wholesale merchant acquiring.29 
The Commission’s assessment  
(30) As will be described in more detail for retail merchant acquiring in S ection 4.2.2.2 , 
wholesale merchant acquiring also shows a trend towards an EEA -wide market.  
                                                 
26  Responses to questions 7 and 9 of Q2 – Questionnaire to merchant acquirers.  
27  Responses to question 8 of Q2 – Questionnaire to merchant acquirers.  
28  Responses to question 3 of Q2 – Questionnaire to merchant acquirers.  
29  Form CO, paragraph 121 . 
 
 
9 (31) Much like the majority of  retail merchant acquiring  custo mers , the majority of 
wholesale merchant acquiring customers indicated in the Commission’s market 
investigation that there  are no significant barriers to acquiring these services from 
outside Italy.30 
(32) For wholesale merchant acquiring in Italy, the barrier t hat domestic scheme networks 
can pose to international acquiring appear less relevant. Many banks that source 
merchant acquiring services on the retail market indicate that they retain merchant 
acquiring of the Italian domestic PagoBancomat scheme in -house31 and Nexi does not 
offer wholesale merchant acquiring for the PagoBancomat scheme.32 
(33) Ultimately, the question whether the appropriate geographic market definition is EEA -
wide or national can be left open, as the Commission finds that the Transaction does 
not cause competitive concerns for either geographic market definition.  
4.2.2.  Merchant acquiring at retail level  
4.2.2.1. Product market definition  
Commission’s precedents  
(34) The Commission has previously defined a separate  product market for merchant 
acquiring services.33 While in a number of previous cases, the Commission included 
the provision of POS terminals within the market for merchant acquiring ,34 in more 
recent cases ,35 the Commission has considered separate product markets for the 
provision of merchant acquiring ser vices and the provision of POS  terminals and 
related services.  
(35) In previous decisions,36 the Commission considered that the merchant acquiring 
market could be further subdivided on the basis of the following  criteria : (i) types of 
payment card schemes (inter national/domestic), (ii) payment card brands (e.g. Visa, 
Mastercard), (iii) type of payment card (debit/credit), and (iv) based on whether the 
service relates to a physical payment via a POS terminal or a web -based p ayment (e -
commerce). In all prev ious cas es, the Commission left the precise scope of the product 
market definition open. The Commission has not yet considered separate markets for 
large merchants and small or medium merchants (“SMEs”).  
                                                 
30  Response to question 2 of Q2 – Questionnaire to merchant acquirers.  
31  Responses to question 13 of Q2 – Questionnaire to merchant acquirers . 
32  Form CO, paragraph 225.  
33  See for example  Cases M.7873 – Worldline/Equens/ Paysquare , M.7241 - Advent International/Bain 
Capital Investors/Nets Holding , M.7711 - Advent International/Bain Capital/ICBPI , M.6956 - 
Telefonica/Caixabank/Banco Santander  and M.5241 - American Express/Fortis/Alpha Card . 
34  See Case s M.5241 – American Ex press/Fortis/Alpha Card , M.7241 – Advent International/Bain Capital 
Investors/Nets Holding  and M.7711 – Advent International/Bain Capital/ICBPI . 
35  See Cases M.7873 – Worldline/Equens/Paysquare , M.9357 – FIS/WorldPay  and M.9387 – Allied Irish 
Banks/First D ata Corporation/Semeral .   
36  See for example  Cases M.7873 – Worldline/Equens/Paysquare , M.7241 - Advent International/Bain 
Capital Investors/Nets Holding , M.7711 - Advent International/Bain Capital/ICBPI , M.6956 - 
Telefonica/Caixabank/Banco Santander  and M.5241 - American Express/Fortis/Alpha Card . 
 
 
10 The Notifying Party’s vie w 
(36) In relation to the retail level o f merchant acquiring services, t he Notifying Party 
submits that merchant acquiring and the provision of POS terminals and related 
services jointly constitute a single relevant  market.37 The Notifying Party’s reasoning 
in that respect will be further develop ed in Section 4.2.3 . 
(37) The Notifying Party further submits that the other possible subdivision previously 
considered by the Commission are not appropriate for the reasons set out below:  
(a) A segmentation by type of payment card (credit / debit) or segmentation 
by card brand would  no longer relevant in light of evolution in the market. 
The Notifying Party submits that , from a supply side perspective , merchant 
acquirers typically provide services for both credit and debit cards and most 
card brands and that the POS terminals provided by merchant acquirers accept 
most cards. In addition, the Notifying Party considers that the service offered 
is the same in both cases. From  a demand side perspective, the Notifying Party 
indicates that merchants typically want to be able to accept as many different 
card types as possible.38 
(b) A segmentation by card scheme (domestic / international) would be 
inappropriate in light of the substitu tability between the two schemes. The 
Notifying Party submits that , from a supply -side perspective, most merchant 
acquirers can handle both types of card schemes, and POS terminal s support 
both as well. From a demand -side perspective, the Notifying Party a rgues that 
most merchants request acquiring services for both card schemes. Finally, the 
Notifying Party indicates that , while historically domestic cards were debit -
based and international cards credit -based, today that characterisation no 
longer applies because many debit cards in Italy run either solely on an 
international card scheme (such as Maestro or V -Pay) or are co -badged with 
an international debit card scheme.39 
(c) A segmentation by payment type (physical POS transactions / e -commerce 
transactions ) would not be relevant due to evolution of the market. The 
Notifying Party submits that the boundary between physical POS terminal 
transactions and web -based transactions is expected to blur in the short term 
due to the growth in e-commerce transactions. Fro m a demand -side 
perspective, the Notifying Party submits that this blurring boundary is 
evidenced by the rising popularity of so -called “omni -channel” models, by 
which the merchant acquirer serves as a one -stop-shop for all the merchant’s 
sales channels, b oth physical sales and online.40 
(38) Similarly to the potential sub -segments proposed in the C omm ission’s past decision 
practice for POS terminals (see below in paragraphs (60) onwards), the Notifying 
Party, [BUSINESS SECRET – INTERNAL PROCESSES ], has put forward potential 
separate sub -segments for retail merchant acquiring services based on the size of the 
customers. More precisely, the Notifying Party has provided separate market shares 
                                                 
37  Form CO, paragraph 100 . 
38  Form CO, paragraph 89 . 
39  Form CO, paragraph 90 . 
40  Form CO, paragraph 91 . 
 
 
11 for merchant acquiring services provided to SMEs and mercha nt acquiring services 
provided to large merchants. The Notifying Party classifies merchant s with less than 
EUR [BUSINESS SECRET – INTERNAL PROCESSES ] million per year in electronic 
transactions as SMEs, and the rest as large merchants.  The Notifying Party submits 
that a sub -division of the merchant acquiring market by customer size is not 
appropriate as customers are heterogeneous and differ on multiple dimensions, of 
which size is only one .41 
The Commission’s assessment  
(39) The Commission’s market investigation  was inconclusive on whether the sub -
segmentations considered in previous Commission decisions, namely (i) types of 
payment card schemes (international/domestic), (ii) payment card brands (e.g. Visa, 
Mastercard), (iii) type of payment card (debit/credit), and (iv) based on whether the 
service relates to a physical payment via a POS terminal or a web -based payment (e -
commerce), are relevant.  
(40) For all sub -segmentations listed, a slight majority of customers indicated that 
merchant acquiring services are no  different for any of the proposed sub -
segmentations. However, a majority of competitors did indicate differences, 
specifically naming differences in pricing, as well as additional risks concerning e -
commerce transactions (e.g. fraud).42 
(41) Concerning a differenti ation between large customers and SMEs, the Commission’s 
market investigation gave some indications pointing in the direction of separate 
merchant acquiring product markets:  
(a) Large merchants tend to source POS terminals separately from merchant 
acquiring se rvices more often than SMEs;43 
(b) A larger proportion of large merchants consider that they have special needs 
that only a limited number of merchant acquirers can meet, such as 
reconciliation, authorization, settlement, dispute management and support for 
large transaction volumes;44 
(c) Large merchants tend to operate a significant number of POS terminals, and 
require reactive support in their retail outlets throughout the country;45 
(d) A larger proportion of large merchants considered that merchant acquirers 
based outside of Italy credibly supply merchant acquiring services to 
businesses in Italy and larger merchant more often indicated to switch to a non -
Italian merchant acquiring provider in case of a price increase.46 
                                                 
41  Form CO, paragraph 81.  
42  Responses to question 8 of Q1 – Questionnaire to merchants and question 17 of Q2 – Questionnaire to 
merchant acquirers.  
43  Responses to question 9 of Q1 – Questionnaire to merchants.  
44  Responses to question 10 of Q1 – Questionnaire to merchants.  
45  Responses to question 41 of Q1 – Questionnaire to merchants.  
46  Responses to questions 15 and 17 of Q1 – Questionnaire to merchants.  
 
 
12 (42) Additionally, the Notifying Party submits that  large customers, more so than SMEs, 
typically source their merchant acquiring services through tenders. While the 
Commission considers this plausible, it was not able to conclusively confirm this in 
the market investigation.  
(43) However, the distinction betwe en large merchants and SMEs remains blurred and to 
a certain extent  arbitrary.   The above -mentioned differences and tendencies do not 
allow the Commission to draw a clear line between large merchants and SMEs.  For 
example, the definition used by the Notif ying Party (EUR [BUSINESS SECRET – 
INTERNAL PROCESSES]  million annual card transaction value) leads to a situa tion 
where some multinational companies are defined as SMEs due to their limited card 
payment volumes with the Parties in Italy. Moreover,  the majority of both large 
merchants and SMEs indicated not to have particular needs that distinguish them from 
other merchants .47 Additionally, some customers defined as SMEs may exhibit 
sourcing behaviours associated with  large merchant s, namely the use of tender 
processes and separation  between merchant acquiring servic es separate from POS 
terminals,  and vice versa.  
(44) For the purpose of the assessment of this Transaction , the Commission therefore 
considers that retail merchant acquiring for large merchants  and SMEs form a 
combined product market that is heterogeneous in nature and is characterised by 
differentiated customer segments.   
(45) The question s of whether the appropriate product market definition is merchant 
acquiring as a whole or whether separate pro duct markets exist for any of the 
remaining segmentations  listed in paragraph  (35), which were considered in previous 
decisions,  can be left open, as  the Commission finds that no competitive concerns  arise 
for any of the possible product market definitions.  
4.2.2.2. Geographic market definition  
Commission’s precedents  
(46) In past decisions, the Commission has considered the market for merchant acquiring 
to be like ly national in scope, except  for merchant acquiring services for payments 
made through web -enabled interfaces (e-commerce) which were considered to  be at 
least EEA -wide .48 The precise scope of the geographic market definition was 
ultimately left open.  
The Notifying Party’s view  
(47) The Notifying Party claims that the relevant geographic market  for merchant acquiring  
is EEA -wide, because of recent consolidation movements within the merchant 
                                                 
47  Responses to question  10 of Q1 – Questionnaire to merchants.  
48  See Cases M.9387, Allied Irish Banks/First Data Corporation/Semeral , M.9357, FIS/Worldpay , and 
M.7873, Worldline/Equens/ Paysquare . This follows from the Commission’s previous decisions in e.g., 
M.6956, Telefonica/Caixabank/Banco Santander , and M.5241, American Express/Fortis/Alpha Card . See 
also M.7241, Advent International/Bain Capital Investors/Nets Holding , para. 30, whe re the Commission 
considered that the market for merchant acquiring services for all plausible market segmentations, except 
web-enabled transactions, is most likely national in scope, whereas the market for merchant acquiring 
services for payments made thr ough web -enabled interfaces would be at least EEA -wide.  
 
 
13 acquiring sector at EEA level,49 and increased competition from non-Italian, as well 
as multinational merchant acquirers at the level of  merchant acquiring  in Italy .50 In 
addition, the Notifying Party submits that merchants and banks tend more and more 
often to procure merchant acquiring services at EEA level.51 With respect to t his last 
argument, the Notifying Party however acknowledges that , while it is particularly true 
of large merchant s, with retail stores in several countries, the argument only applies 
to SMEs and smaller merchants to the extent that they migrate towards alt ernative 
payment solutions (such as ApplePay, Samsung Pay and Google Pay ) and on -line 
payment solutions.  
(48) The Notifying Party also explains that regulatory developments within the SEPA zone , 
and in particular the so -called “passportin g” rules provided unde r the second Payment 
Service Directive (“PSD2”)52 now allow banks from other European countries to enter 
the Italian market provided they comply with certain regulatory requirement s and 
apply for the relevant licenses in Italy.53 In this regard however, the Notifying Party 
acknowledges the subsistence of domestic card schemes in several countries within 
the SEPA zone (including Italy, with the PagoBancomat scheme) that require 
compliance with slightly different procedures . 
The Commission’s assessment  
(49) As previously acknowledged by the Commission54 and submitted by the Notifying 
Party, there is a trend towards harmonisation between Member States, opening up 
national merchant acquiring markets to competitors from elsewhere in the EEA.  
(50) The Commission’s market investigation supported the existence of this trend . Only a 
minority of merchants consider that it would be challenging to procure merchant 
acquiring services from merchant acquirers based outside of Italy, and approximately 
half the customers indicated th at they consider offers from non -Italian merchant 
acquirers when sourcing merchant acquiring services.55 Furthermore, a majority of 
customers indicated they would  switch to a non -Italian provider in case of a small but 
significant and non -transitory increas e in price (“SSNIP”).56 
(51) Despite this trend, there are still several  factors that point in the direction of a national 
market  for merchant acquiring services .  
(52) In response to the market investigation, a large majority of merchants based in Italy  
indicated th at they currently still  source at national level.57 This is in line with the 
                                                 
49  Form CO, paragraphs 122  – 123. 
50  Form CO, paragraphs 124  – 139. 
51  Form CO, paragraphs 140 – 143. 
52  Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment 
services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and 
Regulation (EU) No 1093/2010, and repealing Directive 2007 /64/EC.   
53  Form CO, paragraphs 144 – 152. 
54  See, for example, case M.7873 - Worldline/Equens/Paysquar e, paragraph 99.  
55  Responses to questions 12 and 13 of Q1 – Questionnaire to merchants.  
56  Responses to question  17 of Q1 – Questionnaire to merchants.  
57  Responses to question s 12 of Q1 – Questionnaire to merchants.  
 
 
14 Notifying Party’s estimates according to which only [10-20]% of the Italian merchant 
acquiring market is supplied by international players.58 
(53) Additionally, the geographic footprints  of merchant acquirers active in the EEA differ 
significantly between the different countries. Only a limited share  of players offer their 
services truly throughout the entire EEA, whereas other players focus only on one or 
several countries . The Parties  clearly are among this latter group : Nexi is exclusively 
active in Italy, and ISP Acquiring performs less than [0-5]% of its acquiring activities 
outside of Italy.59  
(54)  Also, the market investigation found national specificities which point  in the direction 
of a national market. The domestic scheme  networks  are a key example of this. For 
the countries which have a domestic scheme  network , including Italy, cards under the 
domestic scheme network , or under a domestic scheme network  co-badged with an 
international scheme  network , are still widely used . According to the Notifying Party’s 
estimates, PagoBancomat represents approximately [30-40]% of all card payments in 
Italy.60 In the market investigation, only very few non -Italian merchant acquire rs 
indicated that they were able to provide merchant acquiring services for the Italian 
domestic PagoBancomat scheme.61 
(55) Despite the fact that PagoBancomat cards are often co -badged with an international 
network scheme,62 the domestic scheme remains relevant.  Many merchants and 
merchant acquirers indicate that fees are lower for the domestic scheme.63 A large 
customer indicated that about half of its card payments are PagoBancomat payments, 
and that it considers it essential for its business to be able to accep t PagoBancomat 
payments.64 
(56) Finall y, merchant acquiring services are often procured in conjunction with POS 
terminals ; in the Commission’s market investigation, the large majority of customers 
indicated they do so.65 For POS terminals, a majority of merchants and merchant 
acquirers indicated that it is important for the supplier to have a local presence, for 
example to provide local technical support.66 
(57) In light of the above considerations, the Commission considers tha t the relevant 
geographic scope of the provision of merchant acquiring services at retail level is 
likely to be limited to Italy. Ultimately, the question of whether the appropriate 
geographic market definition is EEA -wide or national can be left open, as the 
Commission finds that the Transaction does not cause competitive concerns for either 
geographic market definition.  
                                                 
58  Form CO, Table 14.  
59  Form CO, footnote 4.  
60  Form CO,  Table 14 and 18. Shares by value of transactions in 2019.  
61  Responses to question 13 of Q2 – Questionnaire to merchant acquirers.  
62  Form CO, paragraph 90 . 
63  Responses to question  8 of Q1 – Questionnaire to merchants and question 1 7 of Q2 – Questionnaire to 
merchant acquirers.  
64  Non-confidential minutes of call with a customer, dated 18 March 2020.  
65  Responses to question 9 of Q1 – Questionnaire to merchants.  
66  Responses to question 43 of Q1 – Questionnaire to merchants  and question 58 of Q2 – Questionnaire to 
merchant acquirers.  
 
 
15 4.2.3.  Provision of POS terminals and related services  
(58) A POS terminal (or “POS”) is the electronic device used to process card payments at 
the m erchant's location. It is a necessary element for physical card based transactions. 
POS terminals are either sold or leased to merchants. POS terminals are supplied either 
together with the merchant acquiring services or on  a standalone basis.    
(59) There are  different types of POS terminals: traditional POS terminals and mobile  POS 
(or “mPOS”) card readers. Traditional POS terminals connect to the merchant 
acquirer’s system through the merchant’s fixed telephone line, through broadband (via 
fixed cable or WiF i) or through  the mobile telephone network. mPOS card readers 
connect to the merchant’s mobile device (smartphone or tablet) via Bluetooth and an 
app on that mobile device then connects to the merchant acquirer. POS terminals are 
used by merchants of diffe rent sizes.  
4.2.3.1. Product market definition  
Commission’s precedents  
(60) As mentioned above in paragraph (34), while in a number of previous cases, the 
Commission included the provision of POS terminals within the market for merchant 
acquiring , in more recent cases  the Commission has considered separate product 
markets for the provision of merchant acquiring services and the provision of POS  
terminals and related services.  
(61) In FIS/Worldpay , the Notifying Party ( Fidelity National Information Services, Inc. ) 
also suggested a potential sub -segmentation by type of POS device or based on the 
size of the POS terminal customers; however, none of the respondents to the 
Commission’s market investigation took a clear position as to whether a possible 
relevant market for the supply of POS terminals should be sub -segmented further by 
type of POS device or based on the size of the POS terminal customers.67 This 
potential sub -segmentation w as not looked into in the competitive assessment carried 
out by the Commission in subsequent cases relating to POS terminals.68 
The Notifying Party’s view  
(62) As explained above in paragraph (36), the Notifying Party submits that merchant 
acquiring and the provision of POS terminals and related services jointly constitute a 
single relevant market. To this effect, the Notifying Party explains that [BUSINESS 
SECRET – SALES S TRATEGY] , and  from a demand perspective the largest number of 
customers are SMEs who do not distinguish between these two services and 
systematically procure both as part of one and the same package, as they are mostly 
unaware of the different steps of the  card payment value chain , and find it more 
convenient to source POS terminals and merchant acquiring services together .69 
(63) While acknowledging the fact that some large merchants source POS terminals 
separately from their merchant acquiring services, the Not ifying Party considers that 
this is only a reflection of the economic arbitrage these customers are making between 
sourcing these products and services separately or procuring them through a bundled 
                                                 
67  See Case M.9357, FIS/Worldpay . 
68  See Case M.9387, Allied Irish Banks/First Data Corporation/Semeral . 
69  Form CO, paragraphs 111 and 112.  
 
 
16 offer, and as such it should not be regarded as an indica tion of the existence of two 
separate markets. Moreover, the Notifying Party considers that only a minority  of large 
merchants do so, and that at any rate, the distinction between large merchants and 
SMEs is not clear -cut to this respect, because while it is mostly large merchants who 
source POS terminals separately from their merchant acquiring services, some SMEs 
may also do so.70 
(64) Finally, t he Notifying Party submits that a segmentation of the market for the provision 
of POS terminals and related services by type of POS terminals would not be 
appropriate, because traditional POS providers also exercise a meaningful con straint 
on alternative players, who provide mPOS card readers.71 
The Commission’s assessment  
(65) The Commission’s market investigation was not ful ly conclusive on whether the 
provision of POS terminal s and related services  forms  a separate product market from 
merchant acquiring. The majority of merchants indicated that they procure POS 
terminals and merchant acquiring services together. This holds true for large 
merchants as well, although a larger proportion of large merchants s ources POS 
terminals separately than for SMEs. When asked whether or not the same person in 
the organisation is responsible for the procurement  of merchant acquiring services and 
POS terminals, both models were similarly common.72 
(66) With regard to a further s ub-segmentation of a potential market for the provision of 
POS terminals, the vast majority of merchants and merchant acquirers indicated that 
POS terminals are interoperable with any scheme network.73 The majority of 
merchants and merchant acquirers did in dicate that differences in the provision of 
different types of POS terminals exist. For example, different purchase / rental prices 
were mentioned, as well as different capabilities and services of the devices. For 
smartPOS terminals for example, digital s ervices such as app lication s need to be 
offered to unlock functionalities of the device.74 
(67) Ultimately, the question s of whether POS terminals form a separate product market 
from merchant acquiring services and whether further sub -segmentation , by the type 
of POS terminal75 is appropriate can be left open, as the  Commission finds that the  
Transaction does not lead to competitive concerns under any product market definition  
set out above . 
                                                 
70  Form CO, paragraphs 113 and 114.  
71  Form CO, paragraph 109.  
72  Responses to questions 9 and 38 of Q1 – Questionnaire to merchants.  
73  Responses to question 39 of Q1 – Questionnaire to merchants and question 53  of Q2 – Questionnaire to 
merchant acquirers.  
74  Responses to question 40 of Q1 – Questionnaire to merchants and question 5 4 of Q2 – Questionnaire to 
merchant acquirers.  
75  A sub -segmentation by customer size, as suggested in case M.9357  – FIS/Worldpay  by the No tifying Party 
(Fidelity Information Services, Inc.) is not considered appropriate, in line with the findings for merchant 
acquiring (paragraph (40) to (44)) 
 
 
17 4.2.3.2. Geographic market definition  
Commission’s precedents  
(68) In its decisional pr actice, the Commission considered that the market for the supply of 
POS to merchants is likely national in scope but eventually left the question open.76 
The Notifying Party’s view  
(69) The Notifying Party submits that the relevant geographic market for the provision of 
POS terminals and related services is EEA -wide, and considers that the same 
arguments that have been put forward in its claim that the relevant geographic market 
for retail merchant acquiring is  EEA -wide also apply to the provision of POS term inals 
and related services.77 As an illustration of the increased presence of multinational and 
alternative foreign players in the Italian market, the Notifying Party focuses on the 
example of SumUp , who  provided [BUSINESS SECRET – NEXI’S ESTIMATE ] POS in 
Italy in 2017, [BUSINESS SECRET – NEXI’S ESTIMATE ] in 2018 and [BUSINESS 
SECRET – NEXI’S ESTIMATE ] in 2019, being in 2019  part of the top [5-10] providers 
of POS terminals in Italy.78 The Notifying Party suggests that this example evidences 
the fact  that it is not essential to have a local presence or local service staff to provide 
POS terminals and related services  to merchants in Italy.  
(70) Moreover, the Notifying Party submits that the existence of a domestic scheme 
(PagoBancomat) is not an obstacle t o the provision of POS terminals and related 
services to customers in Italy by non -Italian players, since such players could either 
adopt the same payment protocol as the one used by PagoBancomat  or request that 
PagoBancomat certifies their proprietary pro tocol . The Notifying Party however 
acknowledges that this latter option could take up to [BUSINESS SECRET – NEXI’S 
ESTIMATE ] months.79 
The Commission’s assessment  
(71) The Commission’s market investigation gave indications that the market for the 
provision of PO S terminals could be national in scope. The majority of merchants and 
merchant acquirers indicated that a local presence in Italy is necessary to supply POS 
terminals in Italy. Reasons mentioned include local technical assistance and 
maintenance, as well a s language and cultural aspects.80 Despite th ese results, the 
majority of respondents also indicated not to perceive any barriers to supplying POS 
terminals on EEA -wide level.81 
                                                 
76  See Cases M.9387, Allied Irish Banks/First Data Corporation/Semeral , M.9357, FIS/Worldpay , and 
M.7873, Worldline/Equens/Paysquare . 
77  Form CO, paragraph 157 . 
78  Form CO, paragraph 157 and 158.  
79  Form CO, paragraph 159.  
80  Responses to question 43 of Q1 – Questionnaire to merchants and question 5 8 of Q2 – Questionnaire to 
merchant acquirers.  
81  Responses to question 43 of Q1 – Questionnaire to merchants and q uestion 60 of Q2 – Questionnaire to 
merchant acquirers.  
 
 
18 (72) Ultimately, the question whether the appropriate geographic market definition is  EEA -
wide or national can be left open, as the Commission considers that the Transaction 
does not cause competitive concerns for either geographic market definition.  
4.2.4.  Payment card processing – acquiring processing  
4.2.4.1. Product market definition  
Commission’s precedents  
(73) The Commission previously considered a distinct market for card processing and 
within that market, it has discussed the existence of separate relevant markets for 
acquiring processing services and issuing processing services. The exact market 
definition was ultimately left open.82 Within acquiring processing, the Commission 
has identified a possible further sub -segmentation  based on (i) the payment card 
scheme (domestic v. international) and (ii) the platform, distinguishing between 
physical POS t erminals and through web -enabled interfaces (e -commerce). The exact 
market definition was ultimately left open.83 
The Notifying Party’s view  
(74) The Notifying Party considers that  a distinction in processing between POS and web -
enabled transactions does not app ear appropriate neither at EEA  level, nor in Italy, 
since the activity of processing POS and web -enabled transaction are the same, and 
the fees for the processing of POS terminals and web -enabled transactions are 
substantially similar .84 The Notifying Party  nonetheless considers that the exact scope 
of the product market can be left open.85 
The Commission’s assessment  
(75) The market investigation did not provide any indications suggesting that the 
Commission should depart from its past decisional practice.  
(76)  In an y event, the Commission considers that, for the purpose of the present case, the 
question of whether acquiring processing forms a single relevant product market or 
whether it would be appropriate to segment it further according to the payment card 
scheme o r the platform can be left open, since the Commission considers that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market regardless of the product market definition.  
                                                 
82  See Cases  M.9452, Global Payments/TSYS , M.7873, Worldline/Equens/Paysquare , and M.7241, Advent 
International/Bain Capital Investors/Nets Holding  
83  See Cases M.9452, Global Payments/TSYS , M.8073, Advent International/Bain Capital/Setefi 
Services/Intesa Sanpaolo Card , and M.7241, Advent International/Bain Capital Investors/Nets Holding . 
84  Form CO, paragraph 119.  
85  Form CO, paragraph 120.  
 
 
19 4.2.4.2. Geographic market definition  
Commission’s prece dents  
(77) In its decisional practice, the Commission has previously left open whether the 
provision of payment card processing services , in general, and of acquiring processing 
services, in particular, is national or EEA -wide in scope .86  
The Notifying Party’s view 
(78) The Notifying Party submits that the relevant geographic market for payment card 
processing, in general, and acquiring processing, in particular, is at least EEA -wide, 
and considers that the same arguments that have been put forward in its claim that the 
relevant geographic market for retail merchant acquiring  is EEA -wide also apply to 
acquiring processing .87 The Notifying Party explains that additional reasons for the 
geographic market for acquiring processing to be considered EEA -wide are the 
increase d presence of multinational and alternative players in Italy and the absence of 
requirement to be an Italian company, or to have a local presence or staff in Italy to 
perform acquiring processing activities on the Italian market. In support of this, the 
Notifying Party explains that Nexi [BUSINESS SECRET – SUPPLY SOURCES] .88  
(79) In addition, the Notifying Party submits that the “passporting” rules provided under 
the PSD2 allow processors to provide processing services in Member States other than 
their home  country.89  
(80) Finally, the Notifying Party claims that the existence of domestic schemes is not an 
obstacle to the performance of acquiring processing activities by non -Italian players 
in Italy, because even where domestic schemes require different procedure s or 
certifications, processors may partner with local banks to provide  the required 
services. As an illustration, the Notifying Party explains that [BUSINESS SECRETS – 
COMMERCIAL STRATEGY ] has partnered with [BUSINESS SECRETS – 
COMMERCIAL STRATEGY ] to pro vide processing services in Italy.90 
The Commission’s assessment  
(81) The market investigation did not provide any indications suggesting that the 
Commission should depart from its past decisional practice.  
(82) In any event, the Commission considers that, for the pu rpose of the present case, the 
question of whether  the relevant geographic market for acquiring processing is EEA -
wide or national can be left open, since the Commission finds that the Transaction 
does not raise serious doubts as to its compatibility with the internal market regardless 
of the geographic market definition.   
                                                 
86  See Cases  M.9452, Global Payments/TSYS , M.7873, Worldline /Equens/Paysquare , and M.7241, Advent 
International/Bain Capital Investors/Nets Holding . 
87  Form CO, paragraph 162 . 
88  Form CO, paragraph 162 . 
89  Form CO, paragraph 162 . 
90  Form CO, paragraph 162 . 
 
 
20 4.3. Framework  of the competitive assessment  
(83) Under Articles 2(2) and 2(3) of the Merger Regulation, the Commission must assess 
whether a proposed concentration would significantly impede effective competition 
in the internal market or in a substantial part of it, in particular through the creation or  
strengthening of a dominant position.  
(84) A merger can entail horizontal effects. In this respect, the Commission Guidelines on 
the assessment of horizontal mergers under the Merger Regulation (“the Horizontal 
Merger Guidelines”)91 distinguish  between two mai n ways in which mergers between 
actual or potential competitors on the same relevant market may significantly impede 
effective competition, namely (a) by eliminating important competitive constraints on 
one or more firms, which consequently would have incr eased market power, without 
resorting to coordinated behaviour (non -coordinated effects); and (b) by changing the 
nature of competition in such a way that firms that previously were not coordinating 
their behaviour are now significantly more likely to coor dinate and raise prices or 
otherw ise harm effective competition. A merger may also make coordination easier, 
more stable or more effective for firms which were coordinating prior to the merger  
(coordinated effects).92  
(85) In addition, a  merger can also entail vertical effects when it inv olves companies 
operating at different levels of the same supply chain. Pursuant to the Commission 
Guidelines on the assessment of non -horizontal mergers under the Council Regulation 
on the control of concentrations between unde rtakings (the “Non -Horizontal Merger 
Guidelines”),93 vertical mergers do not entail the loss of direct competition between 
merging firms in the same relevant market and provide scope for efficiencies . 
However, there are circumstances in which vertical merge rs may significantly impede 
effective competition. This is in particular the case if they gi ve rise to foreclosure.94 
The Non -Horizontal Merger Guidelines distinguish between two forms of foreclosure: 
input foreclosure, where the merger is likely to raise c osts of downstream rivals by 
restricting their access to an important input, and customer foreclosure, where the 
merger is likely to foreclose upstream rivals by restricting their access to a sufficient 
customer base .95   
4.4. Overview of affected markets  
(86) Nexi a nd ISP Acquiring are both active in the provision of merchant acquiring services 
at retail level to merchants, as well as in the provision of POS terminals and related 
services. In addition, Nexi is active in the provision of merchant acquiring services at  
wholesale level to banks, as well as in the provision of acquiring processing services.  
(87) As a result, the Transaction gives rise to two horizontally affected market s with respect 
to : 
                                                 
91  Guidelines on the assessment of horizontal mergers under  the Council Regulation on the control of 
concentrations between undertakings, OJ C 31, 5.2.2004 p.5.  
92  Horizontal Merger Guidelines, paragraph 22.   
93  OJ C 265, 18.10.2008, p. 6.  
94  Non-Horizontal Merger Guidelines, para 18.  
95  Non-Horizontal Merger Guidelines, para 30.  
 
 
21  the provision of merchant acquiring services at retail level to merchant s 
(section 4.5.1 ),  
 the provision of POS terminals and related services (section 4.5.2 ). 
(88) In addition, the Transaction gives rise to three vertical relationships, namely:  
 Wholesale merchant acquiring (upstream) with retail merchant acquiring 
(downstream) ( Section  4.6.1 ) 
 Provision of POS terminals and related services (upstream) with retail 
merchant acquiring (downstream) ( Section  4.6.2 ) 
 Acquiring processing (upstream) with retail merchant acquiring (downstream) 
(Section  4.6.3 ) 
4.5. Competitive assessment of the horizontal overlaps  
(89) As regards the Transaction, the Commission considers it appropriate to focus its  
assessment of horizontal effects on non -coordinated effects. In addition to it, a short 
coordinated effects assessment is however carried out in Section 4.5.3 . 
4.5.1.  Merchant acquiring at retail level  
(90) Both Parties are active in the pro vision of merchant acquiring services at retail level 
to merchants.  At EEA level, the Parties’ combined market shares for all the plausible 
sub-segments identified above in paragraphs (35) and (38) are relatively low , and in 
absolute terms remain below 5% for all sub -segments.  The Notifying Party has 
provided the Commission with market shares estimates for all the plausible sub -
segments identified above in paragraphs (35) and (38) in Italy.96 Table 1 below 
provides the detail of the Parties’ and their competitor’s market shares for a 
hypothetical market for retail merchant acquiring in Italy (without any further sub -
segmentation). Table 2 below summarises the Parties’ market shares for each of the 
potential sub -segment s identified above in paragraphs (35) and (38) in Italy. The 
complete data on the Parties’ and their competitors’  market shares for all plausible 
sub-segments discussed above in paragraphs (35) and (38) in Italy can be found in 
Table 3 to Table 12 below .97  
  
                                                 
96  At EEA level, the Parties’ combined market shares are small, ranging from [0-5]% to [0-5]%, depending on 
the potential sub -segment considered.  
97  For the potential segments of transactions performed on debit cards, transactions perf orme d on credit cards, 
transaction performed using Visa cards, transactions performed using MasterCard cards, transactions for 
large merchants and transactions for SMEs, the Notifying Party argues that it was not possible to find 
reliable data on their com petitor’s sales.  








 
 
30 (95) In addition, the Notifying Party considers that a material share of ISP Acqui ring’s 
volumes is represented by  clients that Nexi would  not be in a position to credibly 
supply . In par ticular, because [BUSINESS SECRET - SALES POLICIES, KNOW -HOW, 
MARKETING PLANS] . The Notifying Party indicates that customers under any of 
these four categories would account for about [10-20]% of ISP Acqui ring volumes.100 
(96) The Notifying Party also submits that large merchants (who account for [50-60]% of 
volumes for Nexi and [50-60]% for ISP ) are sophisticated buyers who have strong 
countervailing buying power and can switch easily.101 The Notifying Party explains 
that [90-100]% of  the contracts of both Parties for large merchants are [BUSINESS 
SECRET – SALES STARTEGY ] years in duration, [90-100]% of these contracts have 
[BUSINESS SECRET – SALES STARTEGY ], and [80-90]% of Nexi contracts, on the 
one hand, and [60-70]% of ISP Acq uiring’s contracts , on the other hand,  have 
[BUSINESS SECRET – SALES STARTEGY ]. The Notifying Party further submits that 
[BUSINESS SECRET – CUSTOMERS’ BEHAVIOUR ].102 In addition, the Notifying 
Party claims that a number of their large merchant customers, rep resenting [40-50]% 
of Nexi’s yearly transaction volumes in 2018 -2019 and [20-30]% of ISP Acqui ring 
yearly transaction volumes in 2018 -2019 [BUSINESS SECRET – SALES 
STRATEGY ].103 
(97) Finally, the Notifying Party claims that the barriers to entry and expansion in the 
market are low , so that the Parties are facing competition from new entrants an d 
alternative players such as SumUp, iZettle, Hobex and myPOS  in addition to 
established strong players such as Banco BPM, UniCredit and Poste Italiane .104 Above 
all, the Noti fying Party considers the market for retail merchant acquiring to be  an 
EEA -wide market (see above paragraph (47)), in which the combined market share  
would amount only to [0-5]%. 
The Commission’s assessment  
(98) At EEA level , the Parties’ combined market shares for all the plausible sub -segments 
of merchant acquiring identified above in paragraphs (35) and (38) are unproblematic  
because these remain below 5% for all sub -segments.  
(99) At nat ional level in Italy,  it should first be mentioned that responses from competing 
merchant acquirers to the Commission’s market investigation provided indications 
that the market shares estimates provided by the Notifying Party might have been 
over-estimate d. A number of major competing merchant acquirers active at retail level 
have provided figures for the volumes of transactions that they process which are 
higher than the Notifying Party’s estimates provided in the Form CO, while only a 
few other indicated  lower volumes of transactions than provided by the Notifying 
Party in the Form CO.105 However, while this would seem to be indicative that the 
Parties’ market share might in fact be lower than indicated in the Form CO, the 
                                                 
100  Form CO, paragraphs 199 – 200. 
101  Form CO, paragraphs 201 – 207. 
102  Form CO, paragraphs 208 – 209 and 212 – 217. 
103  Form CO, paragraphs 210 – 211. 
104  Form CO, paragraphs 218 – 222. 
105  Responses to question 11 of Q2 – Questionnaire to merchant acquirers . 
 
 
31 Commission was not able to full y reconstruct the market for overall merchant 
acquiring at retail level.  
(100)  First, as regards a potential overall market for retail merchant acquiring in Italy , 
while evidencing that Nexi and ISP Acquiring are perceived by their merchant 
customers as being the leading two merchant acquirers in Italy,106 market participants 
also considered other suppliers to constitute credible alternatives. When asked to rank 
merchant acquirers according to their competitive strength in Italy, customers place 
Nexi  first, followed by ISP acquiring second, UniCredit  (whose market share on the 
Italian merchant acquiring market overall is [5-10]%, similar to Nexi’s)  third, Banca 
Sella fourth and BNP Paribas fifth; with ISP Acquiring’s UniCredit’s and Banca 
Sella’s aver age rating being very close to each other.107 It may also be noted that, while 
large merchants rated the above -mentioned competitors of the Parties in the same 
order, SMEs considered ICCREA to be the number five merchant acquirer i n Italy 
instead of BNP Pari bas. In this context, the Commission notes that contrary to the 
Notifying Party’s views, neither customers nor competitors currently consider Fin -
Tech players to be credible players in the Italian market. Overall, the vast majority of 
merchants nevertheles s considered that, post -Transaction, a sufficient number of 
credible alternative suppliers for merchant acquiring services will remain active on the 
Italian market.108 Likewise, a majority of competitors took the vie w that, post -
Transaction, a sufficient num ber of credible alternative suppliers for merchant 
acquiring services will remain active on the Italian market.109 
(101)  Second,  however,  the overall results of the market investigation did not sufficiently 
clearly indicate that  Nexi and ISP Acquiring are close co mpetitors. As mentioned 
above in paragraph (100) , when asked to rank merchant acquirers according to their 
competitive strength in Italy, customers place Nexi first, followed by ISP acquiring 
second  in terms of average grades . However, when asked to identify  competitor s that 
compete closely with each of Nexi and ISP Acquiring in the market  for merchant 
acquiring at retail level, only a minority of merchant s considered  ISP Acquiring to be 
Nexi’s closest competitor . The same proportion of respondents consider ed Unicredit 
to be Nexi’s closest competitor .110 In a si milar way, only a minority of merchants 
consider ed Nexi as ISP Acquiring’s closest competitor, and a very similar proportion 
respond ed that ISP Acquiring’s closest competitor is Unicredit.111 Market respondents 
also frequently mentioned, among the Parties’ c losest competitions, players such as 
Wordline, Banca Sella and SIA.112 Against th is background, the Commission 
considers that the market investigation does not support the conclusion that he Parties 
are each other’s closest competitor, they nevertheless comp ete closely with each other 
within a group that includes  other players, like Unicredit  and Banca Sella .  
(102)  In this context, the Commission notes  that the tender data provided by the Parties in 
support of their claim that  Nexi and ISP Acquiring are not close competitors (see 
                                                 
106  Responses to question 25 of Q1 – Questionnaire to merchants . 
107  Responses to question 25 of Q1 – Questionnaire to merchants . 
108  Responses to question 33 of Q1 – Questionnaire to merchants . 
109  Responses to question 43 of Q2 – Questionnaire to merchants  acquirers.  
110  Responses to question 26 of Q1 – Questionnaire to merchants . 
111  Responses to question 26 of Q1 – Questionnaire to merchants . 
112  Responses to question 26 of Q1 – Questionnaire to merchants . 
 
 
32 paragraph (94) above) appear to have only limited significance based on  the results of 
the Commission’s market investig ation, given that only a minority of customers (and 
mostly large customers) organize the renewing of their contracts for merchant 
acquiring services through tenders ,.113 The market investigation however revealed that 
the majority of the  customers  go through the process of renewing their contracts for 
merchant acquiring services via  bilateral discussion s with two or more potential 
providers , while only a minority of them renewed their contracts through other means, 
such as tenders, bilateral negotiations carri ed out with their current merchant acquirer 
only, or the roll -over of their existing contracts .114 Therefore, as only a minority of 
customers use tenders to renew their contracts, tender data appear of a low evidential 
value . 
(103)  Third, even though switching merchant acquirers entails some burden for merchants, 
a vast majority of customers of the Parties made clear that they could and would switch 
to another supplier in case of a price increase,115 and a significant proportion of 
respondents had indeed switched supplier in the course of the last three years.116  
(104)  Fourth , as mentioned above in section 4.2.2.2 , while currently the evi dence is not 
sufficient to conclude on an EEA -wide market for retail merchant acquiring, the 
market is developing in that direction and there is a growing competitive pres sure from 
non-Italian players. While competitors do not yet perceive non -Italian merc hant 
acquirers to exercise significant competitive pressure in Italy,117 the vast majority of 
customers would consider switching to non -Italian merchant acquirers in case of a 
price increase in Italy,118 and consider s non-Italian merchant acquirers as credible  
alternatives for the supply of their needs in terms of merchant acquiring services.119 
While this appears to be even more the case for large merchants, these elements are 
also shared by a majority of SME merchants.120  
(105)  Fifth , the vast majority of customers and even the majority of competitors who 
responded to the market investigation indicated that they do not expect any negative 
impact from the Transaction, especially with respect to the evolution of prices, the 
quality of the services they receive, the choice of service , as well as innovation.121 
Some even indicate d that they expect price decreases, choice and quality increases and 
more innovation.122  
(106)  In this context, the Commission notes that a minority of respondents, expected a  
negative impact of the Transaction on the different parameters of competition, 
including price. One competitor  further detailed its respective concerns in a follow -up 
                                                 
113  Responses to question 5 of Q1 – Questionnaire to merchants . 
114  Responses to question 5 of Q1 – Questionnaire to merchants . 
115  Responses to question 20 of Q1 – Questionnaire to merchants . 
116  Responses to question 22 of Q1 – Questionnaire to merchants . 
117 Responses to question 21 of Q2 – Questionnaire to me rchants  acquirers.   
118  Responses to question 17 of Q1 – Questionnaire to merchants . 
119  Responses to question 15 of Q1 – Questionnaire to merchants . 
120  Responses to question 15 of Q1 – Questionnaire to merchants . 
121  Responses to question 34 of Q1 – Questionnaire to merchants  and responses to question 64 of Q2 – 
Questionnaire to merchant acquirers.  
122  Responses to question 34 of Q1 – Questionnaire to merchants  and responses to question 64 of Q2 – 
Questionnaire to merchant acquirers.  
 
 
33 submission of 8 June 2020. While most of the concerns exposed by this competitor 
related  to non -horizontal aspects of the Transaction, it also expressed the view that 
Nexi, through the Transaction, might strengthen its position in card issuing (a market 
that is not affected and as a result not discussed in details in the rest of the decision) . 
Since transactions where the merchant’s merchant acquiring provider is also the issuer 
of the card (so -called “on -us” transactions) bear a smaller part of the scheme cost, this 
competitor explains that by increasing its presence both in issuing and in me rchant 
acquiring, Nexi would benefit from a better cost structure compared to its competitors, 
allowing it to undercut its competitors’ prices and allow it to marginalize its 
competitors.123 
(107)  With respect to this submission, the Commission first notes Nexi’s arguments in 
relation to the merged entity’s cost -advantages following the Transaction. In 
particular, Nexi argues such a scenario would imply a pro -competitive efficiency, that 
on-us savings are very small, and that, in any event, they could only be made when 
the acquiring and issuing processing platforms are connected, [BUSINESS 
SECRET] .124 Second, the Commission considers that, the scenario presented by the 
competitor would lead to a price decrease for customers of the Parties in the short term 
(which can be viewed as pro -competitive) . Third , it appears questionable whether it 
would enable the Parties to raise the prices in the mid -to long term. In particular, all 
the arguments presented above regarding the competitive pressure posed by non -
Italian merchant  acquirers, and the Parties’ customers’ ability to switch to non -Italian 
merchant acquirers in case of a price increase or, more generally, should the conditions 
of supply offered by the Parties be worsened, (see in particular paragraph (104)  above) 
suggest that barriers to entry into the Italian market are not significant. These 
arguments apply equally to the theory of harm presented by the competitor  of the 
Parties, and would prevent the merged entity  from engaging successfully into such a 
strategy consisting in raising its prices after having eliminated or weakened 
competition through price decreases.  Therefore, the Commission considers the theory 
of harm put forward in the submission of 8 June not to be founded .  
(108)  The Commission  moreover, considers that the arguments set out in paragraphs (99) to 
(107)  above also apply to the potential sub -segmentation of merchant acquiring based 
on (i) the payment card scheme (merchant acquiring for domestic or international card 
schemes); (ii) the payment card brand (merchant acquiring for VISA or Mastercard 
card schemes); (iii) the payment card type (merchant acquiring for credit or debit 
cards); and (iv) the payment platform (merchant acquiring through physical POS 
terminals or online), which all address the same categor ies of merchants, and for which  
the Parties’ individual and combined market shares are similar to the ones at retail 
level o verall.  
(109)  As regards a potential differentiation  within the market for merchant acquiring 
according to the size of the merchant , the Notifying Parties’ estimates provide that 
the Parties ’ combined supply  share for SMEs would be moderate post -Transaction 
([20-30]%), while their combined supply  share for large merchants would be  more 
significant  ([60-70]%) that their combined market share at an overall retail level . 
These estimates  would appear indicative of closeness of competition between Nexi 
and ISP Acquiring with respect to the supply of larger merchants . 
                                                 
123 Submission by [Competitor of the Parties] dated 8 June 2020 - ID 654. 
124 Submission by the Notifying Party dated 11 June 2020.  
 
 
34 (110)  Albeit significant , the Commission considers that the Parties’ combined supply share 
for large merchants  does not  by itself raise serious doubts as to the compatibility of 
the Transaction with the i nternal market. The market investigation indeed provided 
evidence that most of the customer -specific factors that would likely render  a potential 
price increase from the Parties unsuccessful  are even stronger when large merchants 
only are considered.  
(111)  First, an even greater proportion of large merchants (than for merchants overall) 
mentioned that they engage in bilateral negotiations with multiple suppliers or tenders 
in order to renew their contracts for merchant acquiring,125 which seems  indicative of 
an eve n greater ability to switch away from their current supplier, and even more 
important resources dedicated to screening the market to get the best deal possible.  
(112)  Second, even more than all customers considered together, large customers appear to 
have a part icularly strong ability to switch away to non -Italian merchant acquirer s. 
Most noticeably, a vast majority of large merchants explained that they would consider 
switching to a non -Italian merchant acquirer in case of a price increase  in Italy.126 
Moreover, l arge customers tend to source POS terminals and merchant acquiring 
separately more often than SMEs  do.127 As a result, they could rely on a local provider 
of POS terminals, where customer support and proximity to the retail outlets is more 
important, while selecting a different supplier, which could be a foreign player for the 
supply of merchant acquiring ser vices . To this respect , switching to a non-Italian 
merchant acquirer  for the provision of their merchant acquiring service would be 
comparatively easier  for large merchant s than for SMEs, who tend to bundle more 
frequently their purchases of POS terminals and related services with the procurement 
of merchant acquiring services.  
(113)  Third, even within Italy, large merchants appear to have an even greater ability ( than 
for merchants overall ) to switch away from their current supplier in case of a price 
increase,128 and a large majority of  them consider s that they have either equal or 
stronger bargaining power that the Parties when negotiating the supply of merchant 
acquiring services.129 
(114)  Finally, as for merchants overall, the vast majority of large merchants considere d that, 
post-Transaction, a sufficient number of credible alternative suppliers for merchant 
acquiring services will remain active on the Italian market,130 and did not expect any 
impact from the Transaction, especially with respect to the evolution of price s, the 
quality of the services they receive, the choice of service as well as innovation.131 
  
                                                 
125  Responses to question 5 of Q1 – Questionnaire to merchants . 
126  Responses to question 17 of Q1 – Questionnaire to merchants . 
127  Responses to que stion 9 of Q1 – Questionnaire to merchants . 
128  Responses to question 22 of Q1 – Questionnaire to merchants . 
129  Responses to question 27 of Q1 – Questionnaire to merchants . 
130  Responses to question 33 of Q1 – Questionnaire to merchants . 
131  Responses to question 34 of Q1 – Questionnaire to merchants . 
 
 
35  
(115)  In light of the above, the Commission considers that the Transaction does not raise 
serious doubts as to its compatibility with the internal market in relation to the market 
for the provision of merchant acquiring services , regardless of whether the releva nt 
geographic market is considered national or EEA -wide or if the product market is 
retail merchant acquiring overall or sub -segmented based on (i) the payment card 
scheme (merchant acquiring for domestic or international card schemes); (ii) the 
payment ca rd brand (merchant acquiring for VISA or Mastercard card schemes); (iii) 
the payment card type (merchant acquir ing for credit or debit cards) and (iv) the 
payment platform (merchant acquiring through physical POS terminals or online).  
4.5.2.  Provision of POS term inals and related services  
(116)  The Transaction gives rise to another horizontally affected possible market with 
respect to the supply of POS terminals and related services. Both Nexi and ISP 
Acqui ring provide some of their customers with POS terminals. At EEA level, the 
Parties’ combined market shares are modest, and remain below 5%. In 2017, the 
Parties’  combined market share in the Italian market was [20-30]%, [BUSINESS 
SECRET – EVOLUTION OF MARKET SHARES ] [10-20]% in 2018 and [10-20]% 
in 2019. Moreove r, while the potential sub -segment of traditional POS terminals was 
not affected in neither 2017, 2018 nor 2019, the Parties’ combined market shares in 
the potential sub -segment for mPOS was [20-30]% in 2019.   
(117)  The Notifying Party has provided the Commissio n with market shares estimates for 
the provision of POS terminals and related services in Italy.132 Table 13 to Table 15 
below summarises the Parties’ market shares for each of the potential sub -segment 
considered. It should be noted that since ISP Acqui ring currently obtains POS 
terminals only from Nexi, to avo id double -counting, data for ISP Acqui ring refer to 
the terminals it supplies to its merchants (all of which are sourced from Nexi), while 
for Nexi the data excludes POS terminals supplied to ISP Acqui ring. 
  
                                                 
132  At EEA level, the Parties’ combined market shares are only [0-5]% for 2017, 2018 as well as 2019.  


 
 
38 reliable, since the sum of the Parties’ total market size for these two years is not equal 
to the total market size for all POS terminals. In addition, the Parties have not 
computed market shares for traditional POS and mPOS  separately for the year 2017.   
(121)  Second, a vast majority of customers, as well as a majority of competitors , indicated 
that a sufficient number of credible alternative providers of POS terminals and related 
services  will remain active on the Italian market post-Transaction.134  Moreover, a 
majority of customers indicated that they expect no impact from the Transaction on 
either the price, the quality, the choice or the innovation for POS terminals.135 
Interestingly, a majority of competitors responded that they expect either no impact or 
a price decrease for POS terminals and related services in Italy. As one customer puts 
it, “We are convinced that standardization of terminals and services will allow a 
higher product quality , as well as determine a leveling of p rices and the possibility of 
using more types of payment, even the most innovative ones that the market can make 
available. ”136 Another customers mentions that “ expectations are for an improvement 
of quality, choice of service and innovation ”.137 Similarly, a majority of competitors 
mentioned that they expect either no impact or an increase in the quality of the service, 
the choice offered to customers and the innovation for POS terminals and related 
services in Italy .138 
(122)  If the market for POS termin als was sub -segmented at Italian level according to the 
type of POS terminals, the absence of concerns raised in the course of the market 
investigation, as well as the fact that customers did not expect any impact from the 
Transaction on either the price, the quality, the choice or the innovation for POS 
terminals still holds true. In addition,  the Commission notes that the potential subs -
segment for the provision of traditional POS terminals, representing [90-100]% of the 
total market for POS terminals in 2019, is not affected, while only the potential sub -
segment for the provision of mPOS is. However, in this segment, [BUSINESS SECRET 
– MARKET SHARES’ TREND – KNOW -HOW ] the Parties’ combined share from [40-
50]% to [20-30]% between 2018 and 2019 would appear  to give credit to the Parties’ 
arguments that new entrants and alternative players (such as SumUp, iZettle, Hobex 
and myPOS ), who are particularly active on this segment , pose a significant constraint 
by the Parties in Italy .  
(123)  In light of the above, the Commission considers that the Transaction does not raise 
serious doubts as to its compatibility with the internal market in relation to the market 
for the provision of POS terminals and related services, regardless of whether the 
relevant geographic market  is considered national or EEA -wide.  
                                                 
134  Responses to question 44 of Q1 – Questionnaire to merchan ts and question 61 of Q2 – Questionnaire to 
merchant acquirers . With respect to the alternative possible geographic market definition, it should be noted 
that a  vast majority of customers as well as a vast majority of competitors considered the existence o f a 
sufficient number of credible alternative suppliers  to be even more true at EEA level.  
135  Responses to question 45 of Q1 – Questionnaire to merchants .  
136  Responses to question 45 of Q1 – Questionnaire to merchants .  
137  Responses to question 45 of Q1 – Questionnaire to merchants .  
138  Responses to question 64 of Q2 – Questionnaire to merchant acquirers.  
 
 
39 4.5.3.  Coordinated effects  
(124)  In addition to raising serious doubts as to its compatibility with the internal market 
through non -coordinated effects, a merger may also change the nature of competition 
in such a way that firms that previously were not coordinating their behaviour, post -
merger may be more likely in a better position to coordinate and raise prices or 
otherwise harm effective competition, or make coordination easier, more stable or 
more effective for firms which we re coordinating prior to the merger (coordinated 
effects).139 In assessing coordinated effects, the Commission considers whether (1) 
competitors are likely in a position to reach terms of coordination following the 
Transaction; (2) it would be possible for c ompetitors to monitor potential deviations 
from the terms of coordination, (3) there are deterrent mechanisms to police adherence 
to the terms of coordination and (4) reactions of outsiders may jeopardise  the outcome 
of coordination.  
(125)  In light of the marke t structures of the potential markets for retail markets for merchant 
acquiring in Italy, as well as the potential markets for the provision of POS terminals, 
the Commission considers it to be unlikely that the Transaction would lead to 
coordinated effects .  
(126)  First, in the overall Italian market  for the provision of merchant acquiring services 
at retail level , the merged entity will have a combined market share of [30-40]% in a 
rather fragmented market, where the second biggest competition would have a [5-
10]% market share in Italy . Hence, t he market is characterised by significant 
asymmetry. Such asymmetry of market positions coupled with differences in business 
models pursued by merchant acquirers in Italy (integrated merchant acquirers, such as 
UniCredit o r ISP A cquiring , banks who  rely on wholesale merchant acquiring services 
in order to provide those at retail level, and players such as Nexi active at wholesale 
and retail level) make coordination generally more challenging, as the interest of the 
differen t types of players may not be aligned. Moreover, prices for merchant acquiring 
services are heterogeneous across different customers  and at times subjected to 
tenders, which would make the monitoring of deviations difficult. While a particularly 
aggressive  pricing strategy could be deployed as deterrent mechanism, reactions from 
non-Italian merchant acquirers would likely make coordination unstable, as they are 
already perceived as credible alternatives to Italian players today and customers 
indicated that they would be willing to switch to those in the event of price increases 
in Italy.    
(127)  These arguments in relation to a possible overall Italian market for retail merchant 
acquiring appear  are equally valid if that market were to  be further segmented 
accord ing to the potential sub -segments identified in paragraphs (21) and (25) above . 
In light of these elements, as well as the evidence available to it, the Commission 
considers that the Transaction does not raise serious doubts as to its compatibility with 
the internal market in relation to potential coordinated effects in the Italian market of 
merchant acquiring services at retail level . 
(128)  Regarding  potential coordinated effects in the Italian market for the provision of POS 
terminals and related services , the merged entity would have a moderate combined 
market share of [10-20]% in a rather fragmented market. In particular, the larger 
competitors would have market shares between [5-10]% and [0-5]% and other 
                                                 
139 Horizontal Merger Guidelines, paragraph 22.  
 
 
40 providers, falling under the “Others” category, w ould account for more than half of 
the market with a [60-70]% market share. As such, it appears that the relatively low 
concentration of the market for the provision of POS terminals and related services on 
the supply -side would make reaching terms of coor dination among POS terminals 
providers difficult.140 These considerations would apply even if considering the 
market for POS terminals sub -segmented in Italy by type of POS terminal.  
(129)  In light of these elements, as well as the evidence available to it, the C ommission 
considers that the Transaction does not raise serious doubts as to its compatibility with 
the internal market in relation to potential coordinated effects in the Italian market for 
the provision of POS terminals and related services.  
4.6. Competitive assessment of the vertical links  
4.6.1.  Wholesale merchant acquiring (upstream) with retail merchant acquiring 
(downstream)  
(130)  The Parties do not overlap in the provision of merchant acquiring services at wholesale 
level, since only Nexi is active in this market, pr oviding wholesale merchant acquiring 
services to banks. About half of all its merchant  acquiring volumes are at wholesale 
level to banks  under the so -called Licensing  model , while the other half are direct sales 
to merchants at retail level  under the so -called Direct  model and the Referral  model . 
The vertical relationship between wholesale merchant acquiring (upstream) and retail 
merchant acquiring (downstream) is affected both upstream, because Nexi’s market 
shares are above 30% for the potential Italian wholesale merchant acquiring market  
and some of its sub -divisions, and downstream, because the Parties’ combined market 
share is above 30% for the potential Italian retail merchant acquiring market  and some 
of its sub -divisions.  
(131)  The Notifying Party has provided the Commission with market shares estimates for 
wholesale merchant acquiring for all the plausible sub -segments identified above in 
paragraphs (35) and (38) in Italy,141 except for the potential sub -segmentation between 
large merchants and SMEs (since wholesale merch ant acquiring services are provided 
at a wholesale level to banks only , which would always qualify as large customers ). 
However, the Notifying Party has failed to provide precise market share estimates, as 
well as market share estimates for their competito rs, for lack of visibility into this 
segment. Table 16 below summarises the Parties’ market shares for each of the 
potential sub -segment considered.  The Parties’ market shares for merchant acquiring 
in Italy142 as well as all potential sub -segments discussed above in paragraphs (35) and 
(38) are provided above in Table 1 to Table 12.  
                                                 
140 Horizontal Merger Guidelines, paragraph 45.   
141  At EEA level, the Notifying Party was not able to provi de an estimate of Nexi’s market shares for wholesale 
merchant acquiring.  
142  At EEA level, the Parties’ combined market shares in retail merchant acquiring are small, ranging from [0-
5]% to [0-5]%, depending on the potential sub -segment considered.  

 
 
42 relationship (of which merchant acquiring is only a minor component). It is unlikely 
that customers of another bank (which is currently bundling merchant acquiring 
supplied by Nexi with other in -house banking services) would switch to ISP for the 
full bu ndle of their services; and (ii) should they switch for the sourcing of merchant 
acquiring services only, the Commission notes that ISP is a retail bank which would 
require a much larger retail distribution network to reach and capture merchants from 
other  banks across Italy.147 As regards impact on competition , the Notifying Party 
considers that any input foreclosure strategy would unlikely have a significant impact 
on competing banks at retail level, because merchant acquiring services ultimately 
represent a small proportion of their overall costs (<5%) compared to the value of the 
bundle banks create and sell to merchants. Moreover, there would be no impact on 
barriers to entry, since there are sufficient alternative merchant acquirers from which 
potential entrants can source wholesale merchant acquiring services.148  
(135)  In addition, the Commission reviewed  a complaint from a competitor149 supporting 
the theory of harm that Nexi would enjoy an information advantage in light of its 
position as wholesale merchant acquirer vis-à-vis other retail banks when tendering 
for large clients . The Commission, however, does not consider this theory of harm 
grounded nor merger specific. This theory w ould be based on the consideration that 
Nexi, as a wholesale merchant acquirer, has knowledge of costs for the sourcing of 
merchant acquiring se rvices borne by banks  and that it might leverage this knowledge 
to have a competitive advantage against its riva ls at downstream level. The 
Commission observes that (i)  the market investigation results revealed that banks 
served by Nexi define the price of the bundle of services they offer t o large customers 
independently,150 and (ii)  even if this theory was grounded , it would not be merger 
specific, considering that Nexi’s knowledge of banks’ costs for merchant acquiring 
servi ces would not improve or change  post-Transaction.   
(136)  With respect to potential customer foreclosure,  the Notifying Party claims that the 
Transacti on would have no impact on the current situation, since ISP did merchant 
acquiring in -house, therefore, it did not source from wholesalers in the past and is not 
a current nor a potential customer of other wholesalers.151 
The Commission’s assessment  
(137)  First , as regards ability to engage in a potential input foreclosure strategy , the 
Commission considers that, following the Transaction, the merged entity  despite its 
sizeable market share at wholesale level  would likely not have the ability to engage in 
full or partial input foreclosure, such as raising the price it charges when supplying 
wholesale merchant acquiring services to banks which are active at the retail level for 
merchant acquiring services, or making the conditions of supply less fa vourable.  
Respondents to the market investigation, in fact, indicated that they would switch 
wholesale merchant acquirer following a price increase or the worsening of supply 
                                                 
147  Form CO, paragraphs 243 – 244. 
148  Form CO, paragraph 245 . 
149  Submission by [Competitor of the Parties] dated 8 June 2020 - ID 654.  
150  Responses to question 37 of Q2 – Questionnaire to merchant acquirers.  
151  Form CO, paragraphs 246 – 247. 
 
 
43 conditions and that there would be sufficient alternative wholesale merchant acqu irers 
to switch to, such as SIA, Banca Sella, or ICCREA .152  
(138)  Second , as regards incentive to engage in a potential input foreclosure strategy , the 
Commission considers that, assuming that Nexi would have the ability to put in place 
an input foreclosure strat egy (which, as explained above, is not plausible ), this strategy 
would not be profitable. The profit Nexi would lose in the upstream market for the 
supply of wholesale merchant acquiring services, following an increase in prices or 
the degradation of the s ervice, would not be offset by profit gains at the downstream 
level. The market investigation results indicated that Nexi would have no incentive to 
put in place an input foreclosure strategy, as it would lose economies of scale at 
upstream level, which ar e considered essential to remain competitive, and considering 
that wholesale merchant acquiring services represent Nexi’s core business.153  
(139)  Third , as regards the effects of a potential input foreclosure strategy , as explained 
above, Nexi would have no abili ty to increase the costs of its customers at wholesale 
level, which are its rivals at downstream level, by increasing the price for wholesale 
merchant acquiring services. The customers, in fact, would switch to alternative 
players. Therefore, the Commissio n considers that the Transaction will not result in a 
significant price increase in the downstream market and will not impede effective 
competition.  
(140)  Finally , as regards a potential customer foreclosure strategy , although, as shown in 
Table 1 above, in a  potential  overall market  for retail merchant acquiring in Italy, ISP 
Acquiring would hold  a [20-30]% market share and the Parties’ combined market 
share would amount to [30-40]%, Unicredit being the closest competitor with a [5-
10]% market share, ISP Acquir ing sources its wholesale merchant acquiring services 
only from Nexi. Following the Transaction, ISP Acquiring will continue sourcing 
wholesale merchant acquiring in-house  and, therefore, the Transaction will bring no  
change in the market. Nexi will not have the ability to foreclose access to ISP 
Acquiring  as a customer  for wholesale merchant acquiring to its rivals in the upstream 
market because ISP Acquiring is currently not a customer to other wholesale merchant 
acquirers. In addition, the market investi gation results did not bring to the 
Commission’s attention any concerns regarding a potential customer foreclosure 
strategy.  
(141)  In light of the above, the Commission considers that the Transaction does not give rise 
to serious doubts as to its compatibility with the internal market as possibly deriving 
from its vertical effects  between  the provision of wholesale merchant acquiring 
services (upstream) and of retail merchant acquiring services (downstream).  
4.6.2.  Provision of POS terminals and related services (upstream) with retail merchant 
acquiring (downstream)  
(142)  Both Nexi and ISP Acqui ring provide their customers with POS terminals. The 
vertical relationship between the provision of POS terminals (upstream) and retail 
merchant acquiring (downstream) gives rise  to an affected market because the market 
                                                 
152  Responses to question 45 of Q2 – Questionnaire to merchant acquirers . 
153  Responses to question 46 of Q2 – Questionnaire to merchant acquirers .  
 
 
44 share levels  are above 30% for retail merchant acquiring and certain of its potential 
sub-segments.  
(143)  The Parties’ market shares for the provision of POS terminals and related services in 
Italy are provided above in Table 13. The Parties’ market shares for merchant 
acquiring in Italy  at retail level154 as well as all potential sub -segments discussed above 
in paragraphs  (35) and (38) are provided above in Table 1 to Table 12. 
(144)  Given the Parties’ small ma rket shares in the upstream market for the provision of 
POS terminals and related services, and consequently the combined entity’s inability 
to foreclose access to the provision of POS terminals and related services post -
Transaction, input foreclosure will  not be assessed in this decision.  
The Notifying Party’s view  
(145)  The Notifying Party considers that there is no risk of customer foreclosure since, as 
stated above in paragraph (116) , ISP Acqui ring is already procuring its POS terminals 
exclusively from Nexi pursuant to a long -term agreement, and is therefore not a 
current or potential customer of third -party providers of POS terminals.155 
The Commission’s a ssessment  
(146)  First , as regards ability, the Commission considers that, post -Transaction, nothing 
would change in terms of access to ISP Acquiring’s customer base. Already today, in 
fact, ISP Acquiring sources its POS terminals exclusively from Nexi and, there fore, it 
is not a customer for alternative providers of POS terminals. The Notifying Party 
would have no ability to foreclose access to ISP Acquiring’s customer base as ISP 
Acquiring is not a customer to other players.   
(147)  Second , as regards incen tive and ef fects, it is not necessary for the Commission to 
conclude on whether the Parties would have an incentive to engage in a potential 
foreclosure strategy, or whether such a potential input foreclosure strategy would have 
meaningful effects on the market, as t he lack of ability would already prevent the 
Parties to engage in such a potential foreclosure strategy in the first place.  
(148)  Finally , the market investigation results did not bring any evidence to the 
Commission’s attention with respect to a potential customer foreclosure strategy that 
the Notifying Party might put in place following the Transaction.  
(149)  In light of the above, the Commission considers that the Transaction does not give rise 
to serious doubts as to its compatibility with the internal market in relation to the 
vertical link arising between the provision of POS terminals and related services 
(upstream) and retail merchant acquiring (downstream). Acquiring processing 
(upstream) with retail merchant acquiring (downstream)  
4.6.3.  Acquiring processing (upstream) with retail merchant acquiring (downstream)  
(150)  Both Parties are active in the market for retail merchant acquiring services but only 
Nexi is active in the provision of acquiring processing services to other merchant 
                                                 
154  At EEA level, the Parties’ combined market shares in retail merchant acquiring are small, ranging from [0-
5]% to [0-5]%, depending on the potential sub -segment considered.  
155  Form CO, paragraph 256 .  

 
 
46 (153)  The previ ously mentioned complaint by a competitor159 also covers the vertical 
relationship between acquiring processing and merchant acquiring at retail level. It 
puts forward that Nexi  would have the ability and incentive to foreclose competitors 
downstream in the market for retail merchant acquiring to which Nexi supplies 
acquiring processing. According to this complaint, Nexi would have the ability to 
increase its rivals’ costs in acq uiring processing in order to gain a competitive 
advantage over them at downstream level.  
(154)  With regard to this  input foreclosure strategy , the Commission firstly notes  that 
already today, Nexi supplies its acquiring processing services almost exclusively t o 
ISP Acquiring and, therefore, [BUSINESS SECRET – CUSTOMERS AND QUANTITIES 
SOLD ]. The Notifying Party would therefore have no ability to foreclose access to 
Nexi’s acquiring processing services as Nexi is not an active supplier  to acquiring 
processing cus tomers other than ISP Acquiring. The very few alternative third -party 
customers that Nexi supplies with acquiring processing services represent only [0-5]% 
of the transactions it processes and [BUSINESS SECRET – CUSTOMERS AND 
QUANTITIES SOLD ].  
(155)  As regards incentive to engage in a potential input foreclosure strategy and effects of 
such a potential input foreclosure strategy, it is not necessary for the Commission to 
conclude on whether the Parties would have an incentive to engage in a potential input 
forec losure strategy, or whether such a potential input foreclosure strategy would have 
meaningful effects on the market, as the lack of ability would already prevent the 
Parties to engage in such a potential input foreclosure strategy in the first place.  
(156)  Secon d, as regards the possibility to engage in a potential customer foreclosure 
strategy , the Commission considers that, post -Transaction, nothing would change in 
terms of access to ISP Acquiring  as a customer for acquiring processing . Already 
today, in fact, ISP Acquiring sources its acquiring processing services exclusively 
from Nexi and, therefore, it is not a customer, for alternative providers of acquiring 
processing services. The Notifying Party would have no ability to foreclose access to 
ISP Acquiring as a customer for acquiring processing as ISP Acquiring is not a 
customer, nor actual nor potential, to other players. As regards incentive to engage in 
a potential customer foreclosure strategy and effects of such a potential customer 
foreclosure strategy,  it is not necessary for the Commission to conclude on whether 
the Parties would have an incentive to engage in a potential customer foreclosure 
strategy, or whether such a potential customer foreclosure strategy would have 
meaningful effects on the market , as the lack of ability would already prevent the 
Parties to engage in such a potential customer foreclosure strategy in the first place.  
(157)  Finally , with the exception of the above -mentioned complaint, which appears to be 
based on a wrong understanding of Nexi’s market position in acquiring processing , 
the market investigation results did not bring any evidence to the Commission’s 
attention with respect to a potential input or customer foreclosure strategy that the 
Notifying Party might put in place followi ng the Transaction.  
(158)  In light of the above, the Commission considers that the Transaction does not give rise 
serious  doubts as to its compatibility with the internal market in relation to the vertical 
                                                 
159 Submission by [Competitor of the Parties] dated 8 June 2020 - ID 654. 
 
 
47 link arising between  the provision of acquiring processing  services  (upstream) and of 
retail merchant acquiring services (downstream).  
5. CONCLUSION  
6. For the above reasons, the European Commission has decided not to oppose the notified 
operation and to declare it compatible with the internal market and wit h the EEA 
Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger 
Regulation and Article 57 of the EEA Agreement.   
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President