Survey Reveals Increasing Uncertainty Around SEPA

A year after the transposition of the Payment Services Directive (PSD) and implementation of the single euro payments area (SEPA), European payments professionals are increasingly uncertain with regards to the progress in harmonising and regulating an integrated European payments market. Meanwhile, new competitors are registering rapidly as new payments institutions and are creating major challenges for traditional banks.

Although 85% say the PSD transposition process has been successful, 51% of bank respondents and 36% of non-banks believe that derogations actively hindered the transposition. Over two-thirds (68%) believe there will be a PSD Mark II to replace the deficiencies of the first. While on the other hand, over half (54%) of the respondents say that SEPA is not succeeding, compared to only 24% who think it is.

For the second year, the Financial Services Club ran a survey of payments professionals worldwide to see how successful the implementation of the PSD and SEPA have been since the PSD transposition in November 2009 and implementation of SEPA’s programme of Credit Transfers (SCTs) and Direct Debits (SDDs) at that time.

This year’s survey is sponsored by Dovetail, Earthport and Logica, and was completed by over 320 people covering all of the eurozone and more. Representatives of 42 nations took part during the summer of 2010.


The responses were supportive of the PSD process, with 85% of respondents saying that the process had been successful, with just a few issues related to the use of derogations in some countries.

For these reasons, many believe there will be a new PSD to replace the deficiencies of the first. However, they would rather have a continually adjusted directive rather than new directives drafted every few years.

Meanwhile, 66% of bank respondents had seen major change as a result of the PSD, compared to only 31% of the non-bank respondents. This is a reflection of the major change initiated by the PSD on banks internal systems and processes, and the launch of new competitors. For example, over 70 payments institutions (PIs) were cited by the survey’s respondents as being created since the introduction of the PSD. These included regular suspects, such as PayPal and Western Union, and a few new entrants including Earthport and Voice Commerce.


Respondents are less confident about their knowledge of SEPA this year. Only 55% felt that they understood SEPA well, compared to 62% last year.

The problem relates to a lack of benefits (17%), bank (18%) and corporate (16%) resistance to SEPA, limitation by countries through the use of derogations (17%) and, most importantly, the lack of an end-date (24%) meaning that there is no motivation to implement SEPA instruments.

This is why the majority of this year’s respondents think that the SEPA vision for “all eurozone payments transactions to be processed as though they were domestic” will be achieved between 2014 and 2017 (43% of the vote). This is less optimistic than a year earlier, when 49% of respondents thought it would be achieved before 2014. Interestingly, only 11% of respondents a year ago thought that SEPA’s vision would be realised after 2017, compared to 34% this year.

Chris Skinner, chairman of the FS Club and leader of the research project, said: “Last year’s survey identified major cynicism about the implementation of the PSD, with many saying that derogations and optional services would cause confusion and a lack of parity. Unfortunately this has proven to be the case, as borne out by this year’s survey, but what concerns me more this year is that the cynicism has spread to SEPA. Banks and corporates just don’t get where it’s heading, and this lack of direction is caused by the absence of an end-date. Even with the SEPA Council and the European Commission’s consultation on an end-date, we still don’t have one and, until we do, this headless chicken will remain just that.”


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