We continue our series of articles for the 20th anniversary of the European Payments Council (EPC). This time we interviewed Rita Camporeale, EPC Vice-Chair. We wanted to hear her thoughts on European payments and more particularly on how the EPC has changed over the years, what lessons have been learned and how she pictures the European payments landscape of the future. 

Q. You became EPC Vice-Chair at the end of last year but you have been actively contributing to the EPC’s activities since its inception. How has the EPC changed over the years?

Indeed, my experience in the private banking sector started at the ABI a month before the EPC was created; I joined the ABI in order to follow the developments of the European Union (EU) payments market and became a member of EPC working groups from the beginning.

We can identify three phases in the history of the EPC: the first is from its foundation until the launch of the first EPC Single Euro Payments Area (SEPA) payment schemes (2002-2007). This initial phase was devoted to setting up a stable, representative and efficient organisation. We spent time and energy on developing a common language, in learning how best to cooperate among banks and, later on, among banks and non-bank payment providers. We gained expertise in defining common harmonised payments standards for SEPA. The EPC defined its own governance and identified a proper method of work that allowed its very lean structure of dedicated and competent people to interact efficiently with payment service providers (PSPs) from all SEPA countries represented in the EPC, as well as with European authorities and with all stakeholders of the payments market. This was essential for the creation of payment schemes that met the needs of the different Member States despite their very diverse payment habits and histories, and eventually reach the goal of setting up the SEPA.

The second phase spans from the publication of the first payment schemes to the completion of SEPA migration, i.e. from 2008 to 2016. During this phase the EPC supported and monitored the adoption of the schemes, solving the implementation problems that PSPs encountered and (also backed by the ‘SEPA Regulation’) making SEPA a success. It also launched and facilitated a multi-stakeholder initiative in SEPA card standardisation that subsequently (in 2016) led to the creation of the European Cards Stakeholders Group (ECSG) to further pursue that effort.

The third phase is the current one where the EPC has not only launched another very relevant payment scheme, namely SEPA Instant Credit Transfer (SCT Inst), but was also able to make all payment schemes evolve according to the needs of the market. In addition, in fulfilment of its mandate, the EPC also broadened its activity to devising payment-related schemes that further supported an efficient, innovative and competitive payments market for Europe, like the SEPA Proxy Lookup (SPL), SEPA Request-to-Pay (SRTP) and – very recently – SEPA Payment Account Access (SPAA) schemes.

Q. What key lessons do the last 20 years of European payments integration teach us for the future?

The first lesson is that harmonisation, standardisation and interoperability are critical factors in the supply of payment services, and this is increasingly true in a market which is both more integrated and more open to new solutions and new players.

The second is that it is necessary to keep on cooperating and collaborating with different market players: traditional banks, neo-banks, fintechs, market infrastructures.

Only a constant dialogue between all the different stakeholders of the payments market (including payment service users or PSUs) can make us evolve in sync with the pace of innovation and changes in the markets that are ongoing and will come about in the years to come.

The third is that dialogue, interaction and collaboration with the authorities will also remain key in the future. We have both the European Commission (EC) and ECB retail payment strategies which aim to modernise the European payments market, strengthening the role of the euro in the world. It is important that both authorities look appropriately at all interrelations and interdependencies between the different aspects of the payments market and ensure a genuinely level playing field. It is equally essential that no legislative initiative or authorities’ project impinges on aspects that must be left to market forces. 

Q. What have been the most significant developments in the payments area over the past five years?

While cash remains predominant in several countries, data show that the usage of card and digital payments has significantly increased in recent years. This trend towards cashless payments has been accelerated by the COVID-19 pandemic and will continue to shape the payments world in the years to come. 

At the same time, the PSD2 opened the way for a radical innovation that allowed new actors to enter the payments market, new services to be developed, and ultimately a new way of doing 'banking' –  i.e. 'open banking'. PSD2 introduced more competition between providers of payment services, as well as gave  PSUs a greater choice of payment instruments – for example, between cards and (instant) credit transfers.

The SCT Inst scheme was launched by the EPC in November 2017 and is constantly increasing its reach. According to the latest data published in May 2022, the scheme now includes 2,356 PSPs from 27 European countries. SCT Inst is a game-changer in the payments arena, especially when coupled with data-driven services.

Finally, following the recommendations of the ERPB, the EPC has focused on some payment-related schemes that are crucial for the success of the European payments landscape, namely the SPL scheme and the SRTP scheme, which will hopefully deploy in a broad context in the years to come. 

Q. Finally, how do you see the European payments landscape evolving in the next five years?

The European payments landscape will continue to change, with an additional shift towards more digital and innovative payments.

New payment solutions that leverage on the EPC work done in recent years (e.g. the instant payments and payment-related schemes mentioned above) will be deployed, and further impetus to be increasingly 'open' will come with a possible revision of PSD2 and the Open Finance framework (from 'open banking' to 'open finance').

An increasing trend towards harmonisation, standardisation and digitalisation will also extend further to the international payments, with several initiatives to develop payment solutions that will allow the execution of cross-border payments beyond SEPA in a fast, secure, fair and efficient manner.

Last but not the least, cryptocurrencies, stablecoins and Central Bank Digital Currency (CBDC) and – in particular for SEPA – a possible digital euro, may shape and foster innovation in the payments area, supporting the digitalisation and modernisation of the European economy.