The e-Payment Framework: next steps***
*** In June 2012, the EPC and its members decided to abandon the work on a draft SEPA e-Payment Framework
In response to the rapidly increasing volumes of electronic commerce (e-commerce) payment transactions, the European Payments Council () has committed to develop the SEPA e-Payment Framework which facilitates online payments. It is designed to support interoperability between existing e-payment schemes as well as new e-payment channel schemes, which would like to re-use the SEPA Credit Transfer Scheme and could migrate from a national payment landscape to a SEPA environment.
The framework is not, however, a code of conduct for web merchants on how they should deliver goods and services in time at the appropriate level of quality to consumers. The commercial relations between buyers and sellers of goods and services are not a part of the framework.
In the first quarter of 2011, the three existing e-payment schemes - EPS (Austria), Giropay (Germany) and iDEAL (Netherlands) - carried out their proof of concept (PoC) exercise based on the draft SEPA e-Payment Framework Service Description. The EPC received additional comments from an e-payment scheme which did not participate in this PoC.
Taking into consideration the results of the PoC, the draft SEPA e-Payment Framework documents were amended where needed. It was concluded that further review with regard to legal aspects pertaining to the framework is required. To ensure an integrated approach, the EPC aims to resolve outstanding issues related to the framework by September 2011 before a public consultation will be launched.
European Commission objectives and approach in the areas of market integration and payment innovation on the one hand and competition on the other: next steps
The EPC is committed to promoting SEPA. The EPC develops the scheme rules and frameworks required to achieve SEPA as requested by the Economic and Financial Affairs Council (ECOFIN), the European Parliament, the Directorate General (DG) Internal Market and Services of the European Commission, and the Governing Council of the European Central Bank (ECB). Throughout the past decade, these European authorities have continuously articulated the expectation that industry should develop the harmonised payment schemes and frameworks based on global technical standards, which would allow banks and payment institutions to deliver SEPA payment services to all European citizens and businesses. These authorities stressed that advancing the integration and innovation of the euro payments market would increase the global competitiveness of the European Union (EU).
Recently however, inconsistencies between the European Commission's objectives and approach in the areas of market integration and payment innovation on the one hand and competition on the other have seriously hampered the progress, which the EPC would have liked to have made specifically in the area of cards and e-payments. The EPC found itself subject to several questions and enquiries from DG Competition. While the EPC wholeheartedly subscribes to the view that its work should comply with competition law, the EPC does feel that some recent developments would need discussion between the European Commission services and the EPC in order for the EPC to determine to what extent it can continue to pursue the fulfilment of some of the policy objectives set by the EU.
The EPC Plenary agreed to address the European Commission with a view to incentivise further discussion on this subject. The EPC would welcome a shared understanding between the DG Internal Market and Services, DG Information Society and DG Competition by 2 December 2011 at the latest, when the next meeting of the SEPA Council1 will take place.
Examples highlighting the difficulties the EPC is facing in view of diverging messages from the European Commission in the areas of market integration and payment innovation on the one hand and competition on the other, are included in the article 'Arrested Development' (see link under 'related articles in this issue' below).
Gerard Hartsink is the Chair of the EPC.
Related articles in this issue:
Related article in previous issue:
Innovacompegration (This is Not a Typo). Reflections on the best approach to innovation, integration and competition in payments (EPC Newsletter, Issue 10, April 2011)
1The SEPA Council, which brings together representatives of both the demand and supply sides of the payments market, including the EPC, was established by the European Commission and the ECB in June 2010 to promote the realisation of an integrated euro retail payments market by ensuring proper stakeholder involvement at high level and by fostering consensus on the next steps towards the full realisation of SEPA.
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