02 April 2015

EC migration plans would 'derail the entire Sepa project' - EPC

01 November 2010  |  8441 views  |  0 Sepa

The EC will "effectively derail the entire Sepa project" if upcoming regulatory intervention on migration end dates does not include deadlines for phasing out national schemes, says the European Payments Council.

Earlier this year the European Commission outlined plans for a potential formal proposal for a regulation establishing end dates for euro credit transfer schemes and euro direct debit schemes to comply with 'essential requirements'.

The EPC says it welcomes the possibility of legislation on migration end dates but has slammed large areas of the EC regulation plans.

Chief among these concerns is the possibility that any regulation might fail to establish definite end dates for the phasing out of existing national euro payment schemes. This would means that these existing schemes could become compliant with the 'essential requirements' handling domestic transactions while Sepa would be used exclusively for cross-border transactions in what is called 'Mini-Sepa'.

The EPC is also worried that regulation might allow for multiple competing and 'interoperable' euro credit transfer and direct debit schemes. This concept would do little to overcome the fragmentation of the euro payments market, says the council, which adds it does "not understand why the European Commission contemplates now a scenario so radically different from the approach it has promoted over the past decade".

Meanwhile, the regulation could render obsolete substantial investments made by early movers both on the demand and supply sides who - in response to previous calls by regulators including the EC - have already renewed their payment architecture to comply with the Sepa schemes.

Gerard Hartsink, chair, EPC, says: "In line with expectations expressed by the EU Finance Ministers, the European Parliament and the European Central Bank, the forthcoming Regulation must set end dates for the phasing out of existing national euro credit transfer and euro direct debit schemes to ensure that the high costs of running multiple payment schemes in parallel can be eliminated. A regulatory intervention based on the European Commission's considerations published in March and June 2010, would effectively derail the entire Sepa project and eliminate the extensive benefits Sepa offers bank customers."

However, Hartsink did welcome a move by the EC to hold a public hearing in November for consultation with market participants.

The EPC intervention comes on the day EU law establishes mandatory reachability of all banks in the euro area for cross-border direct debits. In practice, this means that any consumer who holds an account in the euro area, which provides the option to make direct debit payments at a national level, can now make cross-border transactions by SDD as well.

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

26 October, 2010
22 October, 2010
06 July, 2010
10 June, 2010
07 June, 2010
28 May, 2010
04 March, 2010
13 October, 2009
01 October, 2009
10 September, 2009
10 August, 2009
01 May, 2009
24 November, 2008
04 September, 2008
28 January, 2008

Related company news

Your browser is unable to support Flash files.

Top topics

Most viewed Most shared
Europe sets the pace as fintech investment...
6531 views comments | 30 tweets | 20 linkedin
UK online banking fraud losses soar 48%
6165 views comments | 16 tweets | 19 linkedin
Future Money Focus: Mariano Belinky, Santa...
5894 views comments | 12 tweets | 12 linkedin
Apple Pay users running into checkout prob...
5174 views comments | 12 tweets | 15 linkedin
Swift London Business Forum to continue di...
4888 views comments | 5 tweets | 4 linkedin

Featured job

Competitive Package
London, UK

Find your next job