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29 April 2014

EPC: SEPA 2014 and beyond

The April 2014 edition of the European Payments Council Newsletter offers food for thought on how to realise the potential of the Single Euro Payments Area (SEPA), which remains thus far a work in progress.

According to data made available by the European Central Bank, the vast majority of stakeholders in the euro area were expected to have achieved SEPA compliance by the formal 1 February 2014 deadline mandated by European Union law. Meeting this milestone has been a tremendous effort for everybody on the demand and supply side. In the view of the European Payments Council (EPC), congratulations are in order. The industry is proud to have contributed, together with all other stakeholders, to realising this unique integration project launched by the European Commission, the European Parliament, the European Central Bank and EU governments more than a decade ago.
This being said, SEPA remains a work in progress. Keeping in mind that the regulators will also claim a major role in determining how to achieve ‘SEPA 2.0’, the April 2014 edition of the EPC Newsletter addresses, among others, the following topics:
At the request of the European Commission, PwC produced another ‘Economic analysis of SEPA’ which was published in February 2014. Javier Santamaría, Chair of the EPC, provides a critical assessment of the report’s findings and recommendations aimed at identifying "benefits and opportunities ready to be unlocked by stakeholders". Santamaría concludes: firstly, realistic targets, taking into consideration customer preferences, should be agreed with regard to progressing EU market integration in payment services. Secondly, the experience of SEPA roll-out so far suggests that there is room for improvement as regards alignment of objectives, policies and projects among the EU institutions and EU governments responsible for managing this policy-maker-driven integration project. Whether or not SEPA will deliver on its potential depends, at this stage, on the authorities re-instating – and adhering to – a harmonised vision of who should do what to achieve ‘SEPA 2.0’.
The European Central Bank launched, in November 2013, a public consultation on the draft ‘Recommendations for the security of mobile payments’ developed by the European Forum on the Security of Retail Payments (the SecuRe Pay Forum). The Forum is a "voluntary cooperative initiative between relevant authorities from the European Economic Area – supervisors of payment service providers and overseers in particular". We outline the EPC response to the public consultation which concluded on 31 January 2014. While the EPC welcomes the SecuRe Pay Forum’s initiative, it cautions on the risks of stifling emerging solutions and business models by imposing too detailed security requirements at this early stage.
The European Parliament approved its amendments to the European Commission’s proposal for the revised Payment Services Directive (PSD2) in April 2014. EPC's commentator analyses the amendments approved by the European Parliament with regard to the new Article 67, (‘Refunds for payment transactions initiated by or through a payee’), and concludes: further clarification is required to ensure that consumers making SEPA Direct Debit (SDD) payments can continue to rely on the ‘no-questions-asked’ refund right when using the SDD Core Scheme. Concerning the proposed new set of rules related to the activity of third party payment service providers offering payment initiation or payment account information services, he finds that there remains considerable scope for amendments to ensure the security of bank customers’ funds and data with payment account access services.
Last but not least: the EPC again encourages all stakeholders to join the debate on the further evolution of the SEPA Credit Transfer (SCT) and SDD Schemes. The next generation SCT and SDD Rulebooks and associated implementation guidelines will be published in November 2014. These rulebook versions will then take effect in November 2015. As previously reported, all interested parties had been invited to submit suggestions for possible modifications to the next generation rulebooks by 28 February 2014. All proposed changes will be released for a three-month public consultation, this time between 19 May and 15 August 2014.


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