Sepa Council established to kickstart EU payments convergence

The European Commission and European Central bank have hosted the first meeting of the Sepa Council, a new body created to guide the future development of the Single Euro Payments Area project.

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Sepa Council established to kickstart EU payments convergence

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The meeting brought together top-level representatives from both the demand and supply sides of the European payments market.

Participants from the demand side included consumers, retailers, businesses/corporates, small and medium-sized companies, and national public administrations. Supply side representation comes from the European Payments Council (EPC), co-operative banks, saving banks, commercial banks, and payment institutions. In addition, four national central bank board members represent the Eurosystem.

The establishment of the new body follows strong criticism of the Sepa governance structure and the lack of consultation with end-users. At the EBAday meeting in Luxembourg earlier this month, banks too expressed their concerns about the expense of the project, its sluggish returns and the failure of national governments to support the scheme.

Internal market commissioner Michel Barnier describes the formation of the Council as "a crucial step forwards" in the realisation of an integrated market for payments in euro.

"To achieve the full potential of Sepa, we clearly need to improve user involvement in this project, both from early design to final implementation," he says. "I very much hope that this new Council will act as a catalyst to create a retail payment framework fully meeting the expectations of all actors."

The main issues discussed at the first meeting were the need and conditions to establish migration end-dates for Sepa and the future of a Sepa for payment cards.

The Council will meet twice a year for an initial period of three years, say the ECB and the Commission, who will monitor and evaluate its progress over time.

Gertrude Tumpel-Gugerell, ECB executive board member, says the Council will not displace the bank-backed co-ordinating body, the EPC.

"We need to recognise the importance of user involvement for the success of Sepa," she says. "The Sepa Council aims at bringing together, at the highest level, the demand and supply sides of the European payments market, without, however, replacing any of the existing bodies, such as the European Payments Council."

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Comments: (3)

A Finextra member 

Governments have not backed Sepa because they have far more pressing issues to address in Euroland. SEPA will take decades to make any impact because IT IS NOT IMPORTANT to the lives of European citizens who are the people who tend to vote politicians in and out of office. Still, at least the members of the Sepa Council can enjoy a few lunches in Brussels, where I'm told the food is pretty good. 

Barry Kislingbury

Barry Kislingbury Lead Solutions Consultant at ACI Worldwide

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.

A Finextra member 

In my view simply getting to the point where 16 politically separate countries can even contemplate a single payment system is an achievement unequalled anywhere so it's good that the Sepa Council has come together to get things moving. However, one might question whether meeting just twice a year is enough to ensure the drive and focus required for such a mammoth task.

Like Mr Kislingbury I also have concerns around the current lack of stakeholder involvement. Feedback on how best to streamline the Sepa payment process requires input from a far broader corporate audience including software providers. Organisations like the European Direct Debit Association (EDDA) could help to encourage input not just from banks but also from businesses, clearing and settlement mechanisms and regulatory bodies to provide the necessary momentum for SEPA.

It's imperative that definitive deadlines are agreed for compliance and that migration end-dates for SCT and SDD are also set this year. This is a great opportunity for banks to collaborate with technology providers to add value to their retail, commercial and corporate propositions.

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