Curb your enthusiasm
The business case for SEPA continues to weaken, and many banks have no incentive to migrate as their own national payment schemes are effective. Setting a clear deadline would send out a more positive message, reports Shayla Walmsley.If there is a business case for SEPA (Single Euro Payments Area), it has been in little evidence recently. SEPA fatigue has, though. Markets that have been active for years, according to Javier Santamaria, assistant general manager, Banco Santander, are finding the SEPA outcome “has not been good enough”. Now, with uptake of the new SEPA instruments slower than banks anticipated, the business case for it is getting weaker.
For SEPA Credit Transfers (SCTs), according to the European Payments Council (EPC), 4,500 banks in 32 countries offered SCT services for euro payments at the beginning of 2010, comprising around 95% of payment volumes in Europe. However, for SEPA Direct Debits (SDDs), the uptake has been – by the council’s own admission – “gradual”. Richard Davies, director, payment products, Logica, forecasts more banks will take up SDDs between now and November, saying they have been holding off for “non-SEPA reasons”, such as the implementation of the Payment Services Directive (PSD) and the distraction caused by the credit crunch. “Management attention has not been on SEPA – it’s been on staying alive,” he says.
For the banks that are already compliant with the new SDD scheme, the laggards offer a competitive advantage.