The European Commission has finally set out its proposals for EU-wide end-dates for the migration of national credit transfers and direct debits to Single Euro Payments Area (Sepa) instruments.
Just to clarify. A Regulation is the legislative instrument used by the EU if something is not happening quickly enough or in the manner intended.
This proposal must now be approved by the European Parliment and the member states in the form of the council. The council can take several configurations and I suspect that in this case its the ECOFIN version(Finance Ministers). This can happen relatively
quickly, particularly with the broad level of support that exists.
Officials expect mid 2011 for completion according to the FT article today. The revised Regulation is then published in the Official Journal and comes into force in relatively short order eg. Reg 924 was published on 09/10/09 and came into force on 01/11/09.
We can expect something similar with this regulation.
On the one hand, PayPal and other alternative payment providers are making it easier to even put through cross-border payments by using only the email address or mobile phone numbers of a recipient. On the other hand, if the proposed EC measures go through,
banks would be forced to ask payers to enter at least twice as many keystrokes to initiate a domestic payment via SEPA.
While Mr. Barnier might believe that "...making payments cross-border will become as easy as making them at home", I somehow can't escape feeling that "making payments at home will become as hard as making them abroad".
I hope this doesn't result in an overall drop in e-payments adoption and a return to cheques! Why am I suddenly reminded of a recent Finextra article that said that UK's Payments Council is planning to introduce a paper-based alternative to cheques?
The whole point of SEPA is to support a true single market. The overwhelming majority of domestic payments are B2C (or strictly C2B). In the UK this is dominated by Direct Debit bill payments. If the breakdown in Euro-in countries is anything similar
it will take an extra decade before the amount of cross border traffic reaches even 20% of domestic traffic. Does the prospect of buying my gas or my phone service from Germany or Spain appeal? Well, maybe but it will be a while before a large slice of the
population does that. We shall see.
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