Percentage of banks in offering Credit Transfer services
The European Payments Council () launched the Credit Transfer Scheme () in January 2008. As of January 2011, nearly 4500 banks in 32 countries offer services for euro payments. The payment service providers offering services today represent more than 95 percent of payment volumes in Europe. Due to mergers and acquisitions, the absolute number of scheme participants has slightly decreased compared to previous Single Euro Payments Area () market uptake reports featured in this newsletter. The Participant Register, which lists scheme participants (payment service providers offering services), is publicly available at http://epc.cbnet.info/content/adherence_database.
Percentage of Credit Transfer transactions compared to total volume generated by customers
According to the indicators compiled by the European Central Bank (ECB), the share of SCTs as a percentage of the total volume of credit transfers generated by bank customers amounts to 10.4 percent as of November 2010. The ECB indicators are publicly accessible at http://www.ecb.europa.eu/paym/sepa/about/indicators/html/index.en.html.
A figure of 100 percent would indicate that only services are used and have fully replaced non- instruments. The indicators are based on aggregated data provided by clearing and settlement infrastructures in the euro area processing transactions. This data avoids double counting by excluding, for example, transactions sent via links between infrastructures. The data also excludes "on-us" transactions (SCTs between accounts at the same bank) as well as transactions cleared between banks bilaterally or via correspondent banking. The ECB indicators also show market uptake by country.
Percentage of banks in offering Direct Debit services
The launched the Core Direct Debit Scheme () and the Business to Business Direct Debit Scheme () on 2 November 2009. As of January 2011, 3904 banks representing more than 80 percent of payments volume have signed up to the Scheme. Of those, 3374 banks also adhere to the Scheme. The Participant Registers for the and the Schemes list scheme participants (payment service providers offering and / or services) and are publicly available at http://epc.cbnet.info/content/adherence_database.
All branches of banks in the euro area must be reachable for cross-border direct debits; e.g. , since 1 November 2010 as mandated by Regulation (EC) No 924/2009 (Article 8). In April 2010, the Commission services published a "Note on Application of Article 8 of Regulation (EC) No 924/2009 - Reachability for Direct Debit Transactions". This guidance note states that it is the location of the branch of a credit institution (whether it is inside or outside the euro area), and not the location of the parent company, that determines whether the reachability obligation and deadline applies. Furthermore, no distinction should be made between branches with head offices located outside the EU and those with head offices inside the EU.
Percentage of Direct Debit transactions compared to total volume generated by customers
According to the SDD indicators compiled by the ECB, the share of as a percentage of the total volume of direct debits generated by bank customers amounts to 0.08 percent as of November 2010. The ECB SDD indicators are publicly accessible at http://www.ecb.europa.eu/paym/sepa/about/indicators/html/index.en.html.
The figures are based on aggregated data from several clearing and settlement infrastructures/systems located in the euro area. As such, SDD transactions which are cleared bilaterally or processed within the same institution are excluded from this indicator.
for Cards: tracking EMV roll-out
As reported in the previous issues of the Newsletter, good progress is being made in the realisation of a for Cards, which aims to enable a consistent customer experience when making or accepting payments with cards throughout the euro zone. The 's Cards Framework (SCF) outlines high level principles and rules which will deliver this consistent experience when implemented by banks and card schemes. The SCF recognises the EMV standard for -wide acceptance of payments with cards at very high levels of security. EMV is an industry standard to implement chip and PIN security for Point of Sale (POS) card transactions. An important indicator on the progress in this area is the number of cards, POS and ATMs in the market that use chip and PIN for the authorisation of a card payment. More specifically, the percentage of EMV-compliant cards, POS and ATMs in is monitored.
According to latest findings, at the end of the third quarter of 2010, EMV compliance was 79 percent for cards, 95 percent for POS (points of sale) and 95 percent for ATMs. The progress of EMV roll-out based on these findings and other relevant data on the subject are reflected by the ECB Card indicators at http://www.ecb.europa.eu/paym/sepa/about/indicators/html/index.en.html.
Public sector: ready?
No new or additional information has become available since reporting the following in the previous issue of the Newsletter: The Commission's Third Survey on Public Administrations' Preparedness and Migration to (October 2010) analyses the situation as of end February 2010 and confirms that public administrations clearly lag behind other users in terms of preparedness and migration to . The weighted migration rate for the replying public administrations in the euro area was 2.73 percent. This is significantly below the overall migration rate in the euro area (6.2 percent in February 2010).
On the positive side, or so the survey concludes, it should be noted that when compared to the last survey, the migration rate by public administrations has increased (from 1.5 percent in September 2009) and is expected to rise further by the end of 2010, when individual public administrations at central government or federal level in Belgium, Germany, France and Portugal plan to migrate their domestic traffic to . The expected migration of a large share of payments initiated by central and local governments in France (contributing 60 million payments) and the migration of full payments traffic by the Federal Labour Agency in Germany (251 million payments), will substantially increase the public administration migration rate for .
With regard to SDD migration, the results show that with the exception of Belgium and Germany, public administrations have not yet started to migrate to SDD. The weighted SDD rate for the replying public administrations in the euro area was only 0.06 percent. Although this figure is low it exceeds the overall SDD migration rate for the euro area (0.04 percent in February 2010). This figure is, however, expected to progressively increase after 1 November 2010, when the reachability obligation under Regulation (EC) No 924/2009 on cross-border payments in the European Community came into force for euro area banks. On the other hand, it must be recognised that the use of direct debits by public administrations is generally very low or even nil.
Setting a deadline for migration to
As confirmed by the findings of a study requested by the European Commission in 2007, the benefits for bank customers inherent to the harmonisation exercise are contingent upon swift migration to a single set of payment instruments, by both the demand and the supply sides1.The recognises the value of setting a deadline for migration to services. An end date for phasing out legacy euro payment instruments creates awareness, ensures planning security for all market participants and confirms the commitment to making a reality. In line with expectations expressed by the EU Finance Ministers, the European Parliament and the European Central Bank, the believes that end dates must be set for the phasing out of existing national euro credit transfer and euro direct debit schemes to ensure that the high costs of running multiple payment schemes in parallel can be eliminated.
In the Seventh Progress Report on published by the ECB / Eurosystem in October 2010 it is stated that the "Eurosystem expects and SDD to become the credit transfer and direct debit schemes used for euro payments in the EU. After the migration end date, they will have replaced national legacy credit transfer and direct debit schemes for euro payments". The European Parliament called on the European Commission to set a "clear, appropriate and binding end date, which date should not be later than 31 December 2012, for migrating to products"2. On 2 December 2009, the Economic and Financial Affairs Council (ECOFIN - comprising the Economics and Finance Ministers of the Member States) considered "that establishing definitive end-dates for SDD and migration would provide the clarity and the incentive needed by the market, ensuring that the substantial benefits of are rapidly achieved and that the high costs of running both legacy and products in parallel can be eliminated". At its inaugural meeting in June 2010, the Council - bringing together representatives of both the demand and supply sides including the - endorsed a formal declaration stressing their "strong support for the establishment of end-date(s) for migration to Credit Transfers and Direct Debits by means of legislation at level".
On 16 December 2010, the European Commission published a proposal for a Regulation establishing technical requirements for credit transfers and direct debits in euros. The explanatory memorandum accompanying the proposal states that "full integration of the payment market will only be achieved once Union-wide payment instruments replace completely the national legacy instruments". The proposal clarifies that the end dates to be established for compliance with the technical requirements refer to the point in time when these requirements "need to be fulfilled by Union-wide credit transfers and direct debits". The proposal states, in part, that credit transfers shall be carried out in accordance with this Regulation twelve months after it comes into force; direct debits shall comply 24 months after it comes into force.
Gerard Hartsink is the Chair of the .
Related links :
Related articles in this issue:
Related articles in previous issues:
So what's in a Name? Explaining payment schemes, instruments and systems. Clarity on payment terms is critical in the debate over the approach to setting end dates for migration to SEPA through EU Regulation ( Newsletter, Issue 8, October 2010)
The Quantum Leap for SEPA Direct Debit. From 1 November 2010, all banks in the euro area are reachable for SEPA Core Direct Debit ( Newsletter, Issue 8, October 2010)
SEPA Survey 2009: Corporate Readiness on the Rise. The findings confirm that early movers have everything to gain ( Newsletter, Issue 5, January 2010)
1: Potential Benefits at Stake (Capgemini) available at http://www.europeanpaymentscouncil.eu/knowledge_bank_detail.cfm?documents_id=283
2European Parliament Resolutions on the Implementation of the Single Euro Payments Area: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P6-TA-2009-0139&language=EN&ring=B6-2009-0111 (March 2009) and http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2010-0057+0+DOC+XML+V0//EN (March 2010)
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