On SEPA and US Health Care Reform - The EC Discussion Paper 'SEPA Migr...

On SEPA and US Health Care Reform - The EC Discussion Paper 'SEPA Migration End-Date' of March 2010: a Commentary (EPC Newsletter)

24 October 13

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This article by Chair Gerard Hartsink appears in Issue 6 (April 2010) of the Newsletter. Included here is a summary of this article.


It is not uncommon for regulators to get cold feet once the conclusion of major policy projects actually requires decisive regulatory action. The discussion paper " Migration End-Date" recently tabled by the European Commission - contemplating, among others, legislative measures to set a mandatory deadline for migration to - vividly illustrates this phenomenon: after European authorities clearly expected and encouraged the banking industry to deliver a single set of payment schemes as developed by the , the Commission now equates these with a "private monopoly" and considers mandating migration to "multiple, competing" schemes compliant with so-called "essential requirements" instead. Gerard Hartsink outlines how the "essential requirements" approach would effectively defeat the purpose of the harmonisation exercise originally defined by European authorities and turn nil the intended benefits for bank customers. In case lawmakers require a dose of inspiration to successfully conclude this particular policy project, taking a closer look at the action taken by US Congress to ensure reform of the US health care system might help.

The main points detailed in the article are:

  • The European Commission's (EC) discussion paper " Migration End-Date" of March 2010 confuses apples with oranges: if the Schemes developed by the represent a "private monopoly", then European regulators established this monopoly.
  • The European regulators consistently requested migration to the Schemes developed by the .
  • Standardisation and integration based on a single set of payment instruments generate scale and scope advantages benefiting all market participants.
  • Migration to the Schemes developed by the does not imply migration to specific products and services offered by individual payment services providers.
  • Existing national payment systems operate on the basis of a single set of payment instruments developed by national banking communities; a fact that has not been challenged by competition authorities in Member States; hence, it is not plausible to assume that migration to a single set of Schemes developed by the European banking industry could be challenged on grounds of public policy.
  • Creating multiple Schemes compatible with so-called "essential requirements" as contemplated in the EC discussion paper minimises the benefits for bank customers inherent to .
  • The Schemes developed by the evolve according to a transparent, predictable and inclusive change management mechanism providing all stakeholders with the opportunity to engage in the process. Any proposed changes to the Schemes are subject to a three-month public consultation. Proposed changes to the Schemes that find broad acceptance in the entire user community are taken forward.
  • The vision defined by regulators aspires to create one domestic euro payment market where the current differentiation between national and cross-border euro payments no longer exists. The calls on lawmakers to ensure that the full benefits of the legal and technical harmonisation exercise for all market participants can be realised by setting an end date through Regulation for migration to the single set of Schemes developed by the .

This article provides a link to the European Commission Discussion Paper " Migration End-Date" of March 2010.

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