Percentage of banks in offering services
As of October 2009, nearly 4500 banks in 32 countries offer Credit Transfer () services for euro payments. The payment service providers offering services today represent roughly 95 percent of payment volume in Europe. Due to mergers and acquisitions the absolute number of scheme participants has slightly decreased compared to the Market Uptake Report featured in the July 2009 edition of this Newsletter.
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 amounts to 4.5 per cent as of August 2009 (latest data available). The Scheme was launched in January 2008.
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
The launches the Core Direct Debit Scheme and the Business to Business Direct Debit Scheme on 2 November 2009. As of this date, banks throughout are gradually starting to deliver Direct Debit services to their customers. All branches of banks in the euro area must be reachable for Core Direct Debit by 1 November 2010 as mandated by the EU Regulation on cross-border payments in the Community. The confirms a successful kick-off: 2607 banks representing about seventy per cent of payment volumes have signed up to the new schemes and are ready to roll-out Direct Debit services from 2 November 2009 onwards. Of those, 2366 banks are offering both Core and B2B services.
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 in is monitored. According to the latest findings of the Cards Working Group, as of end second quarter 2009, EMV compliance is 67 per cent for cards (up from 62 per cent), 73 per cent for POS (up from 68 percent) and 85 per cent for ATMS (up from 83 per cent).
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.
As reported in the previous issue of this Newsletter, 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. A link to the survey analysis is included at the end of this article. Updated figures regarding the preparedness of the public sector are expected early 2010.
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 devise 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. In his speech at the Direct Debit Launch Event on 13 October 2009 in Brussels EU Commissioner Charlie McCreevy stated: “One remaining obstacle is the absence of guarantees in all Member States on the continued legal validity of existing direct debit mandates when migrating to Direct Debit. Based on the latest news we have received, with the important exception of Germany, this no longer seems a problem within the euro area”. Direct debits are used twice as much in Germany as in the whole of the European Union.
Setting a deadline for migration to
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. 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”.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.
In June 2009 the European Commission 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. For details on the feedback received during this consultation please refer to the article “Towards a migration end date? Commission services publish feedback on public consultation on possible end date(s) for migration” in this Newsletter (see link below). The Commission will discuss this matter with Member States before taking a decision on how best to proceed.
Herman Segers is the Secretary General of the .
The results of the second Commission survey on public administrations migration to are available at the following website:
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