SEPA: Stuck in the Doldrums with "Courageous" Action Needed

Two years after the introduction of the first single euro payments area (SEPA) instruments, the European payments harmonisation project, seen as a major building block to the Lisbon Agenda 2010 goals, seems to be stuck in the doldrums.

At the Financial Services Club in London, which attracted around 50 participants from the payments industry, the ayes only just managed to win a slim majority over the nays in the debate around the question “Is SEPA happening and does it matter?”.

Despite supporters of the motion arguing that there was “wind in the sails” of SEPA in terms of political momentum backing migration, many obstacles still remain, such as:

  • Lack of an end date for legacy payment instruments.
  • Lack of defined ownership: who will take responsibility for setting the end dates?
  • Lack of legal basis: the Payment Services Directive (PSD), which provides the legal underpinning to SEPA Direct Debits (SDDs) for example, is still to be transposed in a third of the euro countries.
  • Lack of a business case for consumers, corporates, banks, automated clearing houses, public administrations, etc.
  • Lack of consistency: the development of additional optional services (AOS) may lead to ’32 flavours’ of SEPA.

Both sides of the debate agreed that “courageous” action was needed in order to scrap legacy payment instruments and drive the SEPA project to completion.


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