Trustly defends Swedish market position after Zimpler complaint

Trustly has defended its Sweden-facing operations after fellow online payments provider Zimpler’s decision to report it to the Swedish Competition Authority (KKV) over the alleged abuse of its dominant market position.

Writing a letter to the KKV in October, Zimpler cited use of so-called exclusivity agreements by Trustly with Swedish-licensed egaming firms on its PayNPlay product, claiming the nature of these agreements prevented operators from using Zimpler products.

The Trustly PayNPlay product enables customers to make payments in real time, allowing the player to register and immediately identify themselves with an operator via BankID.

In a statement provided exclusively to EGR, Trustly said the complaint made by Zimpler contains numerous factual errors and had no merit.

Trustly contends that it is a “relatively small” payments solution in a crowded market, which includes international firms Visa, Mastercard and PayPal.

“While Trustly is highly innovative and presents a compelling solution, we are still a rather small player vying for market share from the established alternatives that still process the vast majority of online payments,” a Trustly statement said.

“In its complaint, Zimpler attempts to narrow and reshape the market so that Trustly appears dominant. In our assessment, direct bank payments to a selection of online merchants in one country cannot constitute an individual market in its own right, and therefore it’s hard to argue that Trustly is dominant,”

“Just as we do, Zimpler is welcome to compete in the online payments market based on the quality and relevance of its payments products,” Trustly added.

In its letter of complaint, Zimpler claims its own know your customer (KYC) software is an equivalent product featuring all the functionality of the PayNPlay solution. However, Zimpler claims that Trustly is using pre-existing agreements and its market share to bar almost 85% of Swedish operators from using its services.

“While it is gratifying to hear that Trustly admits to the use of exclusivity clauses within the area of direct bank payments, we do not share Trustly’s view that it will mean that our merchants will have enough flexibility,” Zimpler added.

Under Swedish competition law, a company is considered to have a dominant position if it holds such market power that it can act without giving any, or giving only limited, consideration to its competitors, customers and suppliers.

The single most important factor in determining whether a company is dominant is the company’s market share. A market share of more than 40% is a sign of dominance under Swedish competition law.

The Swedish Competition Authority is still considering the complaint.