Community

I sincerely hope that this new council does give SEPA focus, the current unregulated regime has turned a laudable goal into a global farce, see the previous comment from Australia.  I have had similar conversations with banks all over the world who are watching Europe, initially in case SEPA was a great success but now in disbelief.  One thing I would ask this new council is to include vendors as well as the end users; many of our smaller clients do not have the resources of the large players and rely on us to educate and produce the solutions they need.

I would agree with the sentiment, banks are not keeping up with client requirements.  For instance if corporates had real time liquidity management, e-invoicing, matching and payments all through a flexible mobile interface, all the banks would be is an account and a processor, they would add little value.  So banks either have to get wise, go real time and add value to allow clients to do what they will do one way or another, or delay the process and not provide the real time infrastructures needed, hmm, makes me think of SEPA.  I believe we will see more delays to regulatory pressures, more alternatives from non-banks and in the not too distant future when banks realize they have to do something, mergers and acquisitions. 

While I agree that procrastination exists I don’t think you can blame the majority of banks, there is simply not a very good business case for SEPA and therefore the smaller banks are doing what they do, waiting for client demand or for regulation.  That does not mean I don’t think SEPA is a good idea, it is (and the whole world is watching in case it succeeds) it’s such a shame that the EU allowed the EPC (the large visionary banks) to implement SEPA in such a way that the business case is bias towards large payments processors with smaller banks handing over their business via outsourcing to their competitors, so its not surprising they have not embraced SEPA with both arms.  SEPA is turning into a case study on how not to modernize the banking system, at least the rest of the world will learn for it, but will we?

Payment hubs have been around for a long time (arguably Logica's BESS and IBM Merva are payment hubs).  They are not new per se, but many payment engine vendors have jumped on the band wagon and are using the hot term "payment hub" to give a new lease of life to what they used to call a “payment engine”.

What these older technology products can't do is change quickly, this never used to be a problem, but it is now with those annoying regulators and customers demanding improvements.  But a wholesale upgrade of a payment engine is just too big, so an alternative is needed.  This is where the term payment hub comes in; payment hubs are based on modern agile technology that allows their functions to be shared as services in a SOA.  They also don’t dictate the wholesale replacement of legacy application (as Richard says they can work along side them) and they manage and integrate the flow of payments through some or all the banks systems (allows for a low impact phased installation), normalizing and centralizing payment flows making management of the clients and reporting to regulators much easier. 

Having helped several banks modernize their payment infrastructures in the past few years, we have seen this lower impact approach gaining wide acceptance. This might be the reason many legacy payment engine vendors have re-branded their products as hubs.

I could not agree more; to be honest I feel that in the current situation the community has lost interest in SEPA.  SEPA and the PSD has been going on for far too long, without a realistic hard end date, inclusion of the end users of the products and limited options for the law makes we will still be in this limbo situation 12 months from now.  The positive spin the EU puts on this simply does not match the progress being made.  The EU needs to either make it happen or stop wasting our time.