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24 November 2009

ECB’s Tumpel-Gugerell: Progress to SEPA: after clarifying interchange fees, cards are leading growth in international payments

The European Payment Services Directive will significantly reduce transaction times to a maximum of three days and requires full transparency on the currency conversion. This will bring significant benefits to all bank customers – consumers and corporates, also in the UK.

At the 7th British Bankers’ Association conference, she presented the following achievement in the SEPA process:

·         The SEPA project has made a lot of progress after clarity was provided on the Multilateral Interchange Fees. In particular, in March 2009, a Joint Statement of the European Commission and the Eurosystem has outlined the way forward on the future SDD business model. This was instrumental to a new Regulation which offers an interim arrangement for cross-border and domestic SDD interchange fees and, hence, was crucial for the EPC to conclude its work on the SDD.
·         The second achievement in 2009 in the migration process to SEPA has been the close stakeholder involvement. Here - I think - that the EPC has made considerable efforts to involve stakeholders in the further development process of the SEPA payment schemes. For example, the EPC invited all stakeholders to put forward suggestions for amending the SCT, Core SDD and Business-to-Business SDD Rulebooks for the November 2010 releases. The outcome of this has received large support in a public consultation during summer 2009.
·         During 2009, the security of payments has been more prominent on the European agenda. This topic had been a bit neglected in previous years, at least at the European level. Within the EPC, a ‘Good Practices’ guide for the security of payments in the customer-to-bank domain has been published. There was considerable need for such a guide, especially in the field of internet banking, online payments and card payments. We have to realize that in today’s world information can too easily be accessed, stolen and used for fraudulent purposes. The costs of fraud may not have reached commercially unacceptable levels, but in some countries they have reached socially unacceptable levels.
Ms Tumpel-Gugerell raised the issue whether the financial crisis has had an impact on the SEPA project and the pace of migration or not. She explained that, despite the financial crisis, cashless payments increased, on a global basis, by almost 9% to 250 billion transactions per year in 2008. Of this growth, card payments were the strongest driver. In the European Union, card payments reached a total of over 29 billion transactions in 2008, also growing at a rate of almost 9%.
In her view, SEPA offers tremendous opportunities for further harmonization of the use of cards, making them an even more attractive means of payment.
She concluded by saying that “SEPA is also about removing barriers to the single market, making payments more efficient, introducing more competition to the payments industry and speeding up innovation. Hence, rapid SEPA migration would bring tremendous benefits to the European economy as a whole. “

© ECB - European Central Bank

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