Handy, safe, fast… Those are the words that may spring to mind when one thinks about card payments. Today, with more than 47 billion payments in 20141, cards are the most widely used cashless payment method in the European Union. As the search for the perfect holiday gifts now gives way for the sales frenzy, we all experience first-hand that card transactions are continuing to boom.
To ensure a better, safer, more cost efficient and functionally richer card service environment in the Single Euro Payments Area (), the European Payments Council () and the card industry created the SEPA Cards Standardisation Volume (the Volume) in 2009. This document, currently owned by the EPC and maintained by the Cards Stakeholders Group (CSG - a multi-stakeholder body gathering retailers, vendors, processors, card schemes, and the EPC) is regularly updated to ensure it is aligned with the evolution of cards technology and regulation. The latest version, 7.1, was released in December 2015.
In this Blog, Claude Brun, Chair of the EPC Cards Working Group and CSG Co-Chair, outlines the major updates of the Volume version 7.1.
Remote card payments are now fully included in the Volume
European e-commerce turnover grew by 14 percent in 20142. With 331 million of European citizens already being e-shoppers3 (namely 40 percent of the total European population), remote payments have a considerable potential of development. The latest version of the Volume takes this into account, by integrating for the first time functional and security requirements applicable to card-not-present (also known as ‘remote’) payments. These payments are not only initiated in the context of electronic and mobile commerce, but also by mail and telephone order.
An example of requirements mentioned for the first time in the Volume is the security guidelines for consumer devices used to conduct remote payments.
The Volume now features a cards processing framework
In addition, a new book 7 is now included in this update of the Volume. It covers a cards processing framework, which defines business principles and requirements for market access and participation in card payment processing services (for authorisation, clearing and settlement processes). The main objective of this framework, which was created following a recommendation by the European Central Bank, is to facilitate an open and transparent market. This is illustrated for instance in the request for card schemes to make publicly available the list of Implementation Specifications they support.
The latest Volume version reflects the impact of the Regulation on card interchange fees
In its work to create version 7.1 of the Volume, the CSG analysed the impact of certain provisions of the 2015 European Regulation on interchange fees for card-based payment transactions entering into force in June 2016. Additional requirements and modifications were included in the Volume to reflect this recent evolution of the European cards legislation. As the new version of the Volume was created before the official publication of the revised Payment Services Directive (), it does not take into account this regulatory change. The PSD2-related updates will happen either in a ‘bulletin’ (used for urgent corrective updates), or in the frame of the future version of the Volume.
All stakeholders active in the SEPA cards domain are encouraged to roll out services and products in line with the requirements of the Volume, by December 2018. Requirements published in the previous Volume, 7.0 version, applicable to card-present transactions, and the related implementation timeline (January 2017), remain unchanged.
In conclusion, this latest version of the Volume considerably extends its scope. The Volume is now fully in line with the digital era and the latest regulatory evolutions impacting the card industry.
1 Source: European Central Bank
2 Source: E-Commerce Europe
EPC Press release: The European Payments Council announces the publication of the latest version of the SEPA Cards Standardisation Volume. The new Volume marks a step towards an enhanced security of remote card payments in Europe
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