Securities Services
SEPA - A walk down a blind alley?
Guest writer, Paul Styles, wholesale product marketing manager, ACI Worldwide, says the European Commission has set banks yet another hurdle when it comes to the Single Euro Payments Area (SEPA) by mandating migration to "multiple, competing" schemes.Following what it saw as a clear mandate from the politicians, the banking industry - through the European Payments Council (EPC) - delivered a single set of SEPA payment schemes, only to find that the European Commission seemingly now equates these with a private monopoly and instead is considering mandating migration to "multiple, competing" SEPA schemes compliant with so-called essential requirements.
But even before this latest complication appeared, banks faced the challenge of enticing corporates to move to the new SEPA Credit Transfer (SCT) and Direct Debit (SDD) instruments, which have in some areas been considered the lowest common denominator options.In other words, for banks in a number of European countries, compliance with SEPA effectively meant taking a backwards step in terms of the functionality that they can offer corporate customers.
In response, some within the industry have touted Additional Optional Services (AOS) as the solution to the problem, but AOS come with their own built-in dilemma, in that there is a risk that individual countries will develop additional services independently, which are tied to a particular national community. Such an approach would maintain the fragmented status quo.
Add on top of that the politicians' latest idea of "multiple, competing" SEPA schemes, and one has to wonder whether the European payments industry has been taking a long and expensive walk down a blind alley for the last few years. In a sense though, if the average corporate or man-in-the-street can make a cross-border payment within the eurozone at the same price as a domestic one, then their particular SEPA objective may well have been achieved. Who cares if the banks have to deal with multiple formats and schemes behind the scenes?
Date Posted:5th August 2010