The sixth annual international payments conference hosted by SIA – previously known as ‘Do You SEPA’ – attracted more than 600 participants from the European payments industry. Giacomo Vaciago, economist, Università Cattolica del Sacro Cuore, gave the opening keynote speech addressing the continuing global economic crisis.
According to Vaciago, Europe needed to address three problems:
- What to do with the debt, which is “the debt of a war that we didn’t have”? He suggested a consolidation of debt.
- How to have natural risk aversion, not panic-driven. He said that Europe needed to reduce risk and segregate bank functions.
- Whether or not to go forward with the euro? He believes that the euro project was a great stride forward, but that each country had a different role to play and there was no sense in pretending that every country is a “Germany”, i.e. an economic powerhouse.
He added that the G20 reforms are quite far away from being rolled out. “The G20 reforms have been developed to prevent another crisis, but we are still in crisis,” he explained.
SEPA 3.0: Beyond the End Date
In the next session on the single euro payments area (SEPA), Jean-Yves Muylle, head of unit DG internal market and services – retail issues, consumer policy and payment systems, European Commission (EC), spoke about the state of play in terms of the planned migration to SEPA Credit Transfers (SCTs) (the EC proposal is for February 2013) and SEPA Direct Debits (SDDs) (February 2014). However, there are a few hurdles still to overcome, such as:
- Debate over regulation flexibility, i.e. how much should be left up to Member States.
- Slight disagreement over technical specifications.
- Room to manoeuvre with regards to modalities and details.
- The European Parliament (EP) has introduced amendments to smooth the transition, for example: allowing temporary conversion facilities from Basic Bank Account Number (BBAN) to International Bank Account Number (IBAN); lifting the limit of €50,000; abolishing settlement-based statistical reporting; and ensuring all direct debits are valid after SDD migration.
On the issue of IBAN conversion, Muylle said that many Member States haven’t heard of IBAN, while others have nicknamed it “IBAN the terrible”.
On the positive side, Muylle reports that a deal between the three institutions involved – EP, EC and the European Payments Council (EPC) – will hopefully happen by the end of this year. He said that the EC is to launch a public consultation in order to finalise the end dates.
War on Cash
In the session, ‘More than SEPA: The Future of E-payments’, Giovanni Sabatini, general manager, Italian Banking Association (ABI), argued that the Italian situation is behind the rest of Europe in usage of non-cash payments and said more things were needed to be done to create incentives for consumers to move away from cash beyond the ban on cash for transactions of more than €500. Massimo Arrighetti, chief executive officer (CEO), SIA, agreed that it was important to continue the “war on cash” because of the high cost of cash – estimated to be €10bn per year in Italy – and the market benefits.
Paolo Angelucci, chairman, Assinform, the Italian association of information and communication technology companies and an affiliate of the Confindustria (Confederation of Italian Industry), argued that the “war on cash is a war of civilisation”, and that it was important to outline a transition path to dematerialisation through changing people’s mindset. Assinform is part of the ‘Digital Italy’ project.
However, Mario Dal Co, general manager, Agency for the Promotion of Technologies for Innovation – Presidency of the Council of Ministers, highlighted that many public administrations in Italy still ask citizens to pay in cash – such as Equitalia, the national tax and collections collector. Paolo Martinello, chairman, AltroConsumo and BEUC, the European consumer’s organisation, also pointed out the high proportion of irregular work in Italy does not help with a mass migration to digital payments. He said: “A modern payments system will happen when the Italian economy becomes more transparent, and tax avoidance is tackled. We need to be courageous and pull down the threshold of €500.” He used the example of taxi drivers in Brazil: more than half live in favelas, yet all cabs will accept credit cards as payments.
Payment Initiatives: iDEAL and MyBank
With e-commerce in Italy growing by 19% in the past year, conference participants were interested to hear about payment initiatives such as iDEAL and MyBank to help in the ‘last mile’ uptake by improving the customer experience.
Piet Mallekoote, CEO, Currence, which launched the e-payments scheme iDEAL in the Netherlands in 2006, explained how all three stakeholders in the process – web merchants, consumers and banks – benefit from online banking e-payments (OBeP).
- Real-time payment guarantee.
- No chargebacks and reversals.
- No sign up.
- Simple, familiar, easy-to-use.
- Highly secure.
- Leveraging on investments in internet banking.
- Less disintermediation.
- Improving relationships with banks.
Today, 90% of Dutch web merchants accept iDEAL and 78% of online shoppers use it to pay. The next stage, according to Mallekoote, is to roll it out to other European countries. In addition, some Dutch banks are participating in a pilot phase for a mobile commerce (m-commerce) application.
John Broxis, STEP2 services director, EBA Clearing, spoke about EBA’s new initiative called MyBank, which it officially launched on 19 September this year. It put out a call for banks and e-merchants across Europe to participate in the pilot scheme, to go live in June 2012. Broxis believes that this new initiative will benefit merchants through reduced cost due to automation, improved customer services and the ability to reach new customers. It will benefit the consumer through payments security, the absence of a need to disclose bank or card details and its SEPA-wide coverage.
SIA is throwing its weight behind the MyBank initiative. According to Mario De Lorenzo, central institutions director, SIA, it is the infrastructure that is the key value for MyBank. He believes that SIA can bring to the table its experience in secure payments, specialisation in real-time authorisation systems and deep knowledge of fraud and detection programmes.
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