The study finds that over time, two opposing effects will determine the benefits and challenges of Sepa. First, Sepa will increase competition in the banking industry as it removes the barriers that formerly protected national markets. Second, Sepa will ensure cost savings in payment processing and give rise to business opportunities.

In the short term, during the coexistence of 'old' and Sepa schemes, the banking industry expects Sepa to lead to initial investment costs and a relatively limited impact on the revenue side. But in the long term, when national schemes will have been fully replaced by Sepa schemes, the costs for banks are expected to decrease because of potential economies of scale and scope and innovations such as electronic invoicing.

The revenue side will also be affected by increased cross-border competition and by new market entrants. The findings of this study support the view that a dual Sepa implementation phase should be as short as possible. In fact, the ECB says, a longer migration period would give rise to higher costs than a shorter period.

The study looked at three stages of Sepa development: Sepa co-existence; the ideal Sepa world, and e-Sepa (a future scenario where Sepa has been sucessfully implemented and the payments world is fully electronic, paperless and with less cash). Aggregating the views of participant banks, the ECB found that the net results of changes in payment-related costs and revenues, excluding balance-related income, would be -8.1% in the Sepa coexistence stage, -4% in the ideal Sepa world, and -1.5% in the e-Sepa scenario.

Representatives of eleven major European banks from different euro area countries operating on a pan-European basis participated in the Sepa impact assessment. Nine of them were included in the quantitative assessment, while the other two provided qualitiative assessment to help identify the factors underlying Sepa's impact. Participation involved in-depth face-to-face interviews as well as questionnaires and a commonly agreed methodology.