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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 11 - July 2011

EPC Latest News

What is Your View? EPC invites stakeholders to participate in consultations on the SEPA Scheme Rulebooks and the SEPA Cards Standardisation Volume - Book of Requirements

13.07.11 By Ugo Bechis and Javier Santamaría

INTRODUCTION AND SUMMARY

The European Payments Council (EPC) is responsible for the development and maintenance of SEPA payment schemes, as defined in the SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) Rulebooks. As requested by the relevant European Union (EU) public authorities throughout the past decade, the SEPA payment schemes are defined by payment service providers (PSPs) in a cooperative environment (the EPC). The development of payment schemes through self-regulation by banks, in close dialogue with customers, represents the established approach in all national banking communities and in SEPA.  The EPC calls on EU lawmakers to align the forthcoming SEPA Regulation with industry best practice in the area of scheme development. In line with the annual scheme change management process, possible modifications to the rulebooks are subject to a three month public consultation. Stakeholders are encouraged to provide feedback during the 2011 consultation, which launched in May 2011, on the next release of the SCT and SDD Rulebooks. In June 2011, the EPC and the Cards Stakeholders Group released an updated version of the SEPA Cards Standardisation Volume - Book of Requirements for public consultation. Market participants are invited to share comments on the recent revisions. Ugo Bechis and Javier Santamaría provide details and deadlines regarding the ongoing EPC consultations.

Key Information in this Article

On 23 May, 2011, the European Payments Council (EPC) launched the annual public consultation on possible modifications to the SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) Scheme Rulebooks.

  • All stakeholders are invited to provide feedback by 20 August, 2011. Links to the consultation documents are included at the end of this article.

Moving forward, the European Commission seeks broad executive powers to determine payment functionalities. The EPC stresses that any future changes to the SEPA Schemes mandated by the European Commission should:

  • Be based on adequate market consultation and reflect broad consensus among all stakeholders.
  • Take effect in accordance with the timelines governing the evolution of the SEPA Schemes and the investment cycles of market participants.

On 6 June, 2011, the EPC and the Cards Stakeholders Group released the latest version of the SEPA Cards Standardisation Volume – Book of Requirements (the Standardisation Volume) for public consultation.

  • All stakeholders are invited to provide feedback by 29 July, 2011. The link to the consultation documents is included at the end of this article.
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European Payments Council launches annual public consultation on SEPA Credit Transfer and SEPA Direct Debit Rulebooks

The SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) Schemes evolve over time to reflect changes in market needs and updates in standards. The annual scheme change management process provides all stakeholders with the opportunity to introduce suggestions for changes to the SEPA Schemes. Proposed amends to the schemes are subject to a three month public consultation. Recommendations that find broad acceptance from the entire user community are taken forward, while requests that lack support are not. On 23 May, 2011, the European Payments Council (EPC) launched the annual public consultation on possible modifications to the SCT and SDD Rulebooks. The EPC encourages all Single Euro Payments Area (SEPA) stakeholders to provide feedback by 20 August, 2011. Links to the documentation relevant to the ongoing consultation are included below.

The EPC will approve updated versions of the SCT and SDD Rulebooks in September 2011. Publication of the updated rulebooks then follows a predictable release schedule. The EPC publishes updated versions of the rulebooks in November 2011, which take effect in the third week of November 2012. In accordance with industry best practice, all stakeholders and their suppliers have a one year lead time to address rulebook updates prior to such updates taking effect. The EPC scheme change management process therefore ensures planning security for all stakeholders.

The SEPA payment schemes as defined in the SCT and SDD Rulebooks, developed by the EPC at the request of European authorities, are key elements necessary to create SEPA. The rulebooks contain sets of rules and standards for the execution of SEPA payment transactions that have to be implemented by payment service providers (PSPs). These rulebooks can be regarded as instruction manuals, which provide a common understanding on how to move funds between bank accounts within SEPA. The rules and standards which make up a SEPA payment scheme are defined by PSPs in a cooperative environment (the EPC). The development of payment schemes through self-regulation by PSPs, in close dialogue with customers, represents the established approach in all national banking communities and in SEPA.

EPC calls on EU lawmakers to align forthcoming SEPA Regulation with industry best practice in the area of scheme development

Moving forward, the European Commission (the Commission) seeks broad executive powers to determine payment functionalities. This is set out in the Commission's proposal for a Regulation establishing technical requirements for credit transfers and direct debits in euros, introduced in December 2010 (the Commission proposal). This legislative initiative is commonly referred to as the forthcoming SEPA Regulation, which is expected to set definitive deadlines for migration to harmonised SEPA payment schemes. This Regulation will empower the Commission to mandate changes to the SEPA payment schemes.

The European legislator, i.e. the European Parliament and the Council of the EU representing EU Member States, is now in the process of reviewing the Commission proposal for a SEPA Regulation. The EPC invites EU lawmakers to ensure that any future amendments to the SEPA Schemes, mandated by the European Commission, are at least subject to consultation by the European Central Bank according to its role and responsibilities. In addition, such amendments should reflect a consensus among all stakeholders based on adequate market consultation. Last but not least, deadlines for such amendments to take effect must be aligned with the timelines governing the SCT and SDD Rulebook release schedule and the investment cycles of market participants.

EPC and Cards Stakeholders Group release SEPA cards standardisation requirements for public consultation

On 6 June, 2011, the EPC and the Cards Stakeholders Group released the latest version of the SEPA Cards Standardisation Volume - Book of Requirements (the Standardisation Volume) for public consultation. The Standardisation Volume defines the functional and security standards requirements needed to achieve interoperability based on open and free standards within the SEPA cards market. Version 5.5 of the Standardisation Volume, which is now subject to consultation, includes updates with regard to security requirements, payment with cash back, dynamic currency conversion, mobile contactless payments, payment with aggregated amount and surcharging. To ensure the most effective transaction technology and processes are adopted, the EPC and the Cards Stakeholders Group call on industry stakeholders to review the recent revisions and provide feedback by 29 July, 2011. A link to the documentation relevant to the ongoing consultation is included below.

The EPC carries out a card standardisation programme designed to achieve a consistent customer experience, high levels of security and optimum process efficiency throughout the SEPA cards market. In 2009, the EPC promoted the creation of the Cards Stakeholders Group, together with representatives of five sectors also active in the cards domain. These included retailers, vendors - such as manufacturers of card payment devices and related IT systems - processors, card schemes and banks. The Cards Stakeholders Group develops the SEPA Cards Standardisation Volume. The Cards Stakeholders Group enables the expectations of a broad range of payment card stakeholders to be benchmarked. It also provides strong co-management, alongside EPC, for the process of identifying standard requirements and implementation best practices that will promote interoperability in the SEPA cards market. The collective aim of the EPC and the Cards Stakeholders Group is to establish a framework for a better, safer, more cost efficient and richer card services environment, whatever the card product or scheme may be.

In December 2009, the European Economic and Financial Affairs Council (ECOFIN), which is made up of finance ministers from the various EU Member States, requested in its conclusions on SEPA that the industry should set the conditions for further standardisation in the area of cards.

Ugo Bechis is the Chair of the EPC Cards Working Group. Javier Santamaría is the Chair of the EPC SEPA Payment Schemes Working Group.

Related links:

SEPA Credit Transfer Rulebook: documentation relevant to the annual consultation on possible modifications

SEPA Core Direct Debit Rulebook: documentation relevant to the annual consultation on possible modifications

SEPA B2B Direct Debit Rulebook: documentation relevant to the annual consultation on possible modifications

SEPA Cards Standardisation Volume - Book of Requirements: documentation relevant to the consultation

Related articles in this issue:

Arrested Development. Inconsistencies between European Commission's objectives threaten to hamper SEPA progress

Direct Debit: Killing it Softly. Reflections on the likely demise of one of the most popular payment instruments in Europe

Related articles in previous issue(s):

Innovacompegration (This is Not a Typo). Reflections on the best approach to innovation, integration and competition in payments (EPC Newsletter, Issue 10, April 2011)

The Good, the Bad, the Ugly and a Knight in Shining Armour? European Commission requests unprecedented powers to determine payment functionalities (EPC Newsletter, Issue 9, January 2011)

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