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SEPA equals procrastination

As we approach the mid point of the year, it’s obvious that, despite the many and varied calls for an end date for the use of legacy payment instruments, procrastination is the order of the day, and the European payments industry stumbles on towards some indeterminate SEPA goal.

The take up of SEPA Credit Transfers remains low, and though reachability for SEPA Direct Debits is due to be achieved in November this year, that is only for the core service – it remains voluntary for B2B.

At this rate, the SEPA instruments will continue to be the sideshow, and an expensive one at that. Banks still have to operate legacy and SEPA systems, and will have to for some time to come.

There has been a plea for public authorities to embrace SEPA and its instruments, with the implication that this would provide the boost needed to establish the momentum towards a true SEPA. But in that scenario, the banks remain reactive.

Many banks have seen the light and have positioned themselves for the future of payments in Europe. They have taken a lead role. Perhaps the time has come for other banks to acknowledge that they really don’t have the will to meet their SEPA obligations in full, and outsource to those banks or institutions that have the vision and are ready for SEPA now. Crunch time approaches...


Comments: (2)

Barry Kislingbury
Barry Kislingbury - ACI Worldwide - London 14 May, 2010, 10:41Be the first to give this comment the thumbs up 0 likes

While I agree that procrastination exists I don’t think you can blame the majority of banks, there is simply not a very good business case for SEPA and therefore the smaller banks are doing what they do, waiting for client demand or for regulation.  That does not mean I don’t think SEPA is a good idea, it is (and the whole world is watching in case it succeeds) it’s such a shame that the EU allowed the EPC (the large visionary banks) to implement SEPA in such a way that the business case is bias towards large payments processors with smaller banks handing over their business via outsourcing to their competitors, so its not surprising they have not embraced SEPA with both arms.  SEPA is turning into a case study on how not to modernize the banking system, at least the rest of the world will learn for it, but will we?

A Finextra member
A Finextra member 19 May, 2010, 09:58Be the first to give this comment the thumbs up 0 likes

When it comes to SEPA adoption, it’s not really a matter of whether banks are small or large or even whether there’s a compelling business case in the very short term, but rather how banks see their payments business in the future. Those banks that see payments forming an integral part of their long-term strategy will make the effort to embrace SEPA much sooner than those who view payments as a commodity best outsourced. The business case for SEPA is more cogent if banks have a strategic vision for their payments in the first place.

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