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In your view, which of the following initiatives will have the greatest impact on the European payments market?

European Commission proposal for revised Payment Services Directive (PSD2)
European Commission proposal for new Regulation on interchange fees for card-based payment transactions
Work programme of Euro Retail Payments Board, chaired by European Central Bank
SecuRe Pay Forum recommendations for security of internet payments; for payment account access services; for security of mobile payments
Guidelines and technical standards issued by European Banking Authority pursuant to mandate provided by proposed PSD2 (Articles 86, 87)
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EPC Newsletter
Issue 4 - October 2009

Opinion and Editorial

SEPA Roadmap: how to make SEPA a SuccessEuropean Commission Communication on "Completing SEPA: a Roadmap for 2009-2012"

30.10.09 BY Daniela Umstätter

INTRODUCTION AND SUMMARY

In September 2009, the European Commission adopted a Communication on SEPA outlining a framework for action within six priority areas where greater involvement of all relevant actors over the next three years is required in order to achieve the full implementation of the Single Euro Payments Area. The European Commission's SEPA Roadmap sets clear deadlines for the accomplishment of the identified actions and addresses EU and national authorities, industry and users likewise. Daniela Umstätter has the details.

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How to ensure that SEPA is delivered on time

While the EPC has been successful in designing the necessary Rulebooks for SEPA Credit Transfers (SCT) and SEPA Direct Debits (SDD), migration to the new SCT is very slow. In July 2009, one and a half years after the launch of SCT, only 4.4% of all credit transfers in the EU used SEPA standards. Going forward, it has to be ensured that SEPA is delivered on time and acts as a driver of greater competitiveness and higher growth, benefiting businesses and citizens alike. In its ECOFIN Council1 conclusions of 10 February 2009 the Council "recognised that the current financial crisis and economic slow-down provides opportunities for major efficiency gains and cost savings, thus requiring reinforced commitment to the project from all parties and invited the Commission and the ECB and the Eurosystem to continue their role in identifying the necessary actions for its successful realisation". The European Commission expects that payment service providers will increase their focus on retail financial services in the future. Integrated payment markets will play a key role in the future of these banks due to their pervasive role in our modern societies. SEPA lays the necessary foundations for this.

The SEPA Communication, which is also in line with the view of the European Central Bank, identifies six priority areas where greater involvement of all SEPA players is needed:

Foster migration

In order to minimise the costly period of running legacy and SEPA systems in parallel rapid migration is crucial with public authorities playing a key role, by being both early adopters and promoters of SEPA products. An efficient monitoring of the migration process will help anticipate and remedy possible migration problems. In addition, setting an end-date to the SEPA changeover could significantly boost the SEPA migration process.

Increase SEPA awareness and promote SEPA products

All parties involved in the SEPA changeover need to be fully informed about its numerous benefits. This could be achieved through targeted information and communication initiatives.

Ensure a sound legal environment and strengthen SEPA compliance

The removal of legal barriers and the design of proper business models which are fully in line with competition rules are cornerstones for a smooth SEPA take-up and increased competition in the payments market. The successful implementation of the Payment Services Directive and the new EU Regulation on cross-border payments provide a solid legal basis for SEPA. In addition,  a way must be found to ensure the continued legal validity of existing mandates under the SEPA Direct Debit Scheme. In a self-regulatory context, efficient compliance monitoring deserves special attention.

Promote innovation

SEPA should be a driver for the modernisation of retail payment markets, facilitating the use of internet and mobile phones to make payments and promoting the development of environment-friendly e-invoicing solutions.

Ensure necessary standardisation, interoperability and security

In a network industry such as payments, interoperable, open and highly secure standards which allow for full end-to-end, straight-through processing are essential in order to reap the full benefits of SEPA.

Clarify and improve SEPA governance

A greater steer is needed to ensure that the SEPA project stays on track, that rapid migration is realised and that the ultimate goal of a better service for users fully materialises. The European Commission therefore considers that there is a need for an over-arching SEPA governance model at EU level, which fosters integration of the euro retail payments market in a way that meets the needs of end users and is to be developed in close cooperation with all actors concerned. The main objectives of the new governance structure should be to define a clear strategic vision for SEPA, monitor and support SEPA migration and ensure transparency and accountability. In addition, given the crucial role of the EPC in the SEPA project, the EPC should continue its efforts to ensure transparency and early involvement of all stakeholders.

Way forward

The European Commission will monitor closely the implementation of the SEPA Roadmap and publish progress reports on a regular basis.

Daniela Umstätter serves as Seconded National Expert with the European Commission, DG Internal Market & Services.

  1. The Economic and Financial Affairs Council is one of the oldest configurations of the Council. It is commonly known as the ECOFIN Council, or simply "ECOFIN" and is composed of the Economics and Finance Ministers of the EU Member States, as well as Budget Ministers when budgetary issues are discussed. The ECOFIN Council covers EU policy in a number of areas including: economic policy coordination, economic surveillance, monitoring of Member States' budgetary policy and public finances, the euro (legal, practical and international aspects), financial markets and capital movements and economic relations with third countries. It decides mainly by qualified majority, in consultation or co-decision with the European Parliament, with the exception of fiscal matters which are decided by unanimity.
Related Links:

http://ec.europa.eu/internal_market/payments/sepa/ec_en.htm

http://ec.europa.eu/internal_market/payments/docs/sepa/com_2009_471_en.pdf

Related Articles

The X Factor. Are EU governments still committed to making SEPA a reality?

SEPA only - the EPC Vision. The EPC issues recommendations on end date for migration to the SEPA schemes (EPC Newsletter, Issue 2)

Towards a SEPA migration end date? Commission services publish feedback on public consultation on possible end date(s) for SEPA migration

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