The Payment Systems End Users Committee (EUC) warned last week of risks of SEPA failure unless the end users of payments systems are more widely consulted. They highlight that the combination of the EPC, EU and ECB has insufficient understanding of the needs and views of SEPA users on the proposed SDD scheme. Furthermore, they outline a number of concerns which they say have not been fully consulted upon. One example of this is the selection of creditor mandate flow (CMF) for the setup of direct debits, which the EUC believes is bound to dissatisfy a majority of users. Another is the undisclosed cost of multilateral interchange fees beyond 2012.

The EUC also suggest that the finer details for all SEPA instruments should be agreed with all parties concerned before implementation, and that its deployment should be by instrument rather than through a big bang approach. The concern for me is that they debate the end-date for SEPA migration by suggesting that there should not be an imposed conversion date and that migration should be driven by market forces. Their argument is that if there isn’t the level of consultation they ask for, SEPA will fail.

In my opinion, it’s important to note that SEPA has always been a political initiative to support trade within the EU. It is not a market-led initiative that market forces will drive and therefore by delaying its implementation until those market forces exist will only guarantee that SEPA will fall short.

The EUC do make a valid point about consultation (or lack of) and it is clear that the banking community could do much more in the area of consultation/promotion and communication about the benefits of SEPA with SMEs and the consumer. I believe this is now starting to be addressed by the EU with an open consultation regarding the setting of a mandatory date for the conversion to full SEPA.

However, contrary to the view of the EUC, for SEPA to be truly successful the EU needs to mandate a conversion date now. Only then will we move towards creating a stable and transparent payments environment. The payments industry needs sight of this full SEPA finishing line if it is to willingly participate – further delays will only see countries continuing to run both SEPA and domestic operations. This is inefficient both in terms of operations and cost, and detrimental to the goals of the EU. The current confusion about SDD implementation and mandatory reachability is just one example.

The building blocks have been agreed in the PSD and SEPA rulebooks – waiting for all interested parties across 15-27 countries to agree all the fine detail will only ensure that SEPA never becomes reality.