Let’s set a date for SEPA - Political backing the key for European banks

The European Payments Council (EPC) is pressing EU authorities to allay concerns about the lack of a specific end date for SEPA. Pressure is mounting for such a date to be set so that a transition can take place similar to the launch of the euro currency in 2002.    

The EPC’s challenge was laid down in Brussels recently during the official launch of the SEPA Core and Business to Business Direct Debit schemes, a launch made in line with the forthcoming November release of new payments instruments across the eurozone.

Recent EPC figures show that 2607 banks, representing approximately 70% of SEPA payment volumes, have signed up to the new schemes. These banks are ready to commence SEPA Direct Debit (SDD) services from the 2nd of November 2009 onwards. Of the banks signed up, 2366 are offering both SDD Core and SDD B2B services.
 
The introduction of SEPA Direct Debits follows on from the launch of the SEPA Credit Transfer 18 months ago, an initiative that currently accounts for only 4.4% of all eurozone credit transfers.

The need to accelerate migration

Commenting in Brussels, EPC Chair Gerard Hartsink says "Moving forward, the focus must be on accelerating migration to the new euro payment instruments. Firstly, the European Commission, the European Central Bank and EU governments should implement a SEPA communication campaign comparable to that afforded for the euro introduction. Secondly, public administrations - accountable for up to 20% of electronic payments made in society - must speed up implementation." [1]
 
With no end-date set, Hartsink predicts that it will be difficult to persuade public authorities to shift their focus from domestic issues towards SEPA. A particular benefit that may sway some of these authorities would be the ability to change their payment habits by reducing dependency on local banks. SEPA will make it possible for public authorities to choose from a larger number of suppliers across Europe. Many banks have been unable to compete locally because they could not attract the scale within their domestic range. The transition to SEPA will expand these boundaries which in turn should open up competition.

The movement of public sector to SEPA is seen as a major step in triggering equivalent implementation from other areas of the market.

The European Commission is now considering setting a deadline for the migration of national payment schemes to SEPA to reflect the widespread support for the move.

Hartsink says: "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 SEPA a reality."

[1] European Payments Council Newsletter