European banks call for more political backing for Sepa

European banks call for more political backing for Sepa

The European Payments Council has called on EU authorities to initiate a Sepa communications campaign "comparable to that afforded for the euro introduction" to kick start public support for the Single Euro Payments Area project.

The political call to arms was laid down in Brussels as the bank-backed EPC officially launched the Sepa Core and Business to Business Direct Debit schemes, three weeks ahead of the 2 November release date for the new payments instruments across the euro zone.

The EPC says that to-date 2607 banks representing about 70% of Sepa payment volumes have signed up to the new schemes and are ready to roll-out Sepa Direct Debit services from 2 November 2009 onwards. Of those, 2366 banks are offering both SDD Core and SDD B2B services.

All branches of banks in the euro area must be reachable for Sepa Core Direct Debit by 1 November 2010 as mandated by the EU Regulation on cross-border payments in the community.

The introduction of Direct Debits comes eighteen months after the launch of Sepa Credit Transfers, which currently account for a bare 4.4% of all euro area credit transfers.

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."

Moving public sector payments to Sepa will create critical mass and trigger implementation by other market participants, he says.

Earlier this month, the European Commission said it would consider setting a deadline for the migration of national payment schemes to Sepa after a public consultation exercise showed widespread support for the move.

While payments users have expressed concerns about quality issues relating to direct debits and the need for enough time to become acquainted with the new products, the initiative has been warmly received by EPC.

Says Harsink: "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."

Comments: (2)

A Finextra member
A Finextra member 14 October, 2009, 00:27Be the first to give this comment the thumbs up 0 likes

A call for more political support is hardly surprising given everything the EU does has its basis in politics rather than economics. This is why the Market alone cannot make SEPA work. Let's face it, as long as only 2-5% of payments are cross-boarder, the demand for SEPA will not result in the replacement of domestic payment instruments. Unless the politicians dictate that domestic payment systems be switched off? Are any of them that stupid? As a European citizen, I would rather my politicians deal with rather more important issues  - and there are plenty of such issues that rank ahead of "encouraging" national governments to spend tax payers money on changing public sector payments methods.

Luc Belpaire
Luc Belpaire - SunGard - Mechelen 16 October, 2009, 16:23Be the first to give this comment the thumbs up 0 likes

Support by the public sector for SEPA is definitely going to help drive the adoption rates of the SEPA instruments - Belgium being a good example. An end date might help too, certainly for Credit Transfers.

However, there is also adoption by  multi-national companies operating in various SEPA countries. They have done so because SEPA is a facilitator to centralize their cash and treasury management operations in Shared Service Centers across Europe. It helps them to decrease the number of EUR bank accounts and build standard processes around payments (and collections once SDD will be implemented) backed by central IT platforms. The business case for them is not SEPA; it is best finance practices: centralize and standardize what you can. Please read more on the SunGard 'What Happens Next Blog' at