Facing the Facts in July 2009

Facing the Facts in July 2009

The EPC Newsletter tracks the progress of SEPA roll-out

19 March 10

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Percentage of banks in offering services

As of July 2009, more than 4500 banks in 32 countries offer Credit Transfer ( ) services for euro payments. The payments services providers offering services today represent roughly 95 percent of payment volume in Europe.

Percentage of transactions compared to total volume generated by customers

According to the Indicators compiled by the European Central Bank, the share of Credit Transfers ( ) as a percentage of the total volume of credit transfers generated by bank customers stood at 1.9 per cent in January 2009 (the Scheme was launched in January 2008). As of July 2009 (latest data available) this figure amounts to 4.4 per cent.

The ECB Indicators are publicly accessible at http://www.ecb.int/paym/sepa/timeline/use/html/index.en.html. A figure of 100 per cent would indicate that only services are used and have fully replaced the non- instruments.

The Indicators are based on aggregated data provided by clearing and settlement infrastructures in the euro area processing transactions. These data exclude transactions sent for example via links between infrastructures to avoid double-counting. The data also exclude "on-us" transactions ( Credit Transfers between accounts at the same bank) as well as transactions cleared between banks bilaterally or via correspondent banking.

Launch of the Direct Debit Schemes

On 31 March 2009 the Plenary decided that as of May 2009 it is possible for banks to sign up for participation in the Core Direct Debit Scheme ( ) and / or the Business to Business Direct Debit Scheme ( ). Banks will be able to start delivering euro direct debit services as from 2 November 2009, the launch date of the schemes. The first edition of the Participant Registers for the Scheme and the Scheme, respectively, will be published on the website on 2 October 2009.

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. The latter's aim is to enable a consistent customer experience when making or accepting payments with cards. The 's Cards Framework (SCF) outlines high level principles and rules that when implemented by banks and card schemes will deliver this consistent experience. The SCF recognises the EMV standard as the technology platform for Europe-wide acceptance of payments with cards at very high levels of security. EMV stands for Europay MasterCard Visa programme to implement CHIP and PIN security for card transactions.

An important indicator on the progress in this area is the number of cards, POS (points of sale: terminals at retailers' check outs) and ATMs now in the market that require the use of PIN and CHIP for the authorisation of a card payment. More specifically, the percentage of so called EMV-compliant cards, POS and ATMs is monitored. Confirming related findings of the Cards Working Group, the First Annual Progress Report on the State of Migration in 2008 issued by the European Commission in February 2009 [1] (latest data available) states that to date, EMV compliance is 62 per cent for cards, 68 percent for POS and 83 per cent for ATMs. Annex 3 of the Commission's report provides a detailed table on EMV compliance in each Member State.

preparedness of the public sector

is a policy-maker-driven public harmonisation initiative launched by -governments, the European Commission and the European Central Bank, designed to complete the internal market and monetary union. As a matter of principle it may therefore be expected that the public sector will act as the launching customer of the new payment services.

The First Annual Progress Report on the State of Migration in 2008 issued by the European Commission in February 2009 concluded: "Since its launch, the uptake of in the public sector has been very limited."

In July 2009 the Commission services published the results of the second survey on the preparedness and migration of public administrations to for the reporting period of March 2009. Key findings of this survey indicate that at this stage general preparedness of public administrations seems to be progressing at a faster pace than actual migration and consequently a significant increase in Credit Transfer rates could be expected during the remainder of 2009 and in the course of 2010. Links to the survey analysis and to a separate article in this newsletter on the subject are included at the end of this article.

Validity of existing mandates under the Direct Debit Scheme

In any direct debit scheme, a mandate is completed by the debtor (a customer purchasing goods or services) to authorise the creditor (the provider of goods or services) to collect payments via direct debit. At the same time, a mandate usually includes the authorisation of the debtor bank to pay these collections. To facilitate migration of customers to the Direct Debit Scheme, it is imperative that mandates existing today can be used under the scheme, even if these do not incidentally meet all the requirements of the mandate. Where necessary, Member States must device legislative solutions to ensure the continued legal validity of existing mandates under the Direct Debit Scheme.

According to the First Annual Progress Report on the State of Migration in 2008 issued by the European Commission in February 2009, the following 13 Member States have found a solution to ensure the continued legal validity of existing direct debit mandates when migrating to : Austria, Belgium, France, Ireland, Italy, Netherlands, Portugal, Slovakia, Bulgaria, Denmark, Estonia, Romania and Sweden. No further updated information on this subject was available by publication of this newsletter in July 2009. The continues to closely monitor and report on related developments.

European Commission launches consultation on possible end-date for migration

At this point, the majority of concerned parties shares the view that one or several end dates need to be defined if momentum is to be maintained and creating clarity for all stakeholders is to be ensured. The recognises that making public the fact that there will be an end date is actually more important now than selecting the actual end date. The European Central Bank (ECB) observes that "corporations and public administrations (...) still take a cautious approach" towards implementation. To break that circle of "wait and see", states the ECB, a migration end date from which point onwards only the European payment instruments will exist is needed [2]. 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"[3].The European Commission believes that an end date would send a strong signal to all stakeholders that migration is an irreversible process and would provide certainty so that stakeholders could adopt a strategy and plan necessary investments in the next few years [4].

In June 2009 the European Commission has launched a consultation on whether and how deadlines should be set for the migration of existing payment products - i.e. credit transfers and direct debits - to the new Single Euro Payments Area ( ) products. Feedback from all stakeholders will help the Commission to identify whether there is a need for action in this respect and at which level. The consultation paper presents all the options available today regarding the definition of such an end-date and its potential practicalities:

  • Should it cover only standards or schemes as well?
  • Should it cover only the interbank space or the bank-to-customer space as well?
  • Should it entail full migration or allow the exclusion of certain products?
  • If an end-date is seen as needed, should there be one common end-date for and migration or two separate end-dates?
  • Should they be set at national level and/or at European level?
  • Should they be left to self-regulation or set by regulation?

Interested parties are invited to send their comments to the Commission by 3 August 2009. The consultation document is available at:


Herman Segers is the Secretary General of the .

Related Links:

The results of the second survey on the preparedness and migration of public administrations to published by the Commission services in July 2009 are available at the following website:


Related Articles:

Public Administrations do not fully meet expectations - yet. Commission services publish latest data on SEPA preparedness of public sector

Yes, we can - Part I. Luxemburg: a case study in successful migration to SEPA

SEPA only: the EPC Vision ( Newsletter, Issue 2, 24 April 2009)



[1]  The Annual Progress Report on the State of Migration in 2008 can be found at the following Commission's web-site:

 [2] The Quest for the Holy Grail? - European Financial Integration: Achievements and Hurdles. Speech by Getrude Tumpel-Gugerell, Member of the Executive Board of the ECB. Workshop on "Securing the Future Critical Financial ICT-Infrastructure (CFI)" organized by Parsifal. Frankfurt, 16 March 2009.

 [3] European Parliament. Resolution on the implementation of the Single Euro Payments Area ( ). 9 March 2009.

 [4] European Commission Internal Market and Services DG. Second Meeting of the Forum of National Committees. Discussion Paper on possible End-Date(s) for Migration. 23 March 2009.

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