ECB demands clarification on SEPA

08 December 2008

The ECB has expressed frustration at the lack of clarity on many aspects of the Single Euro Payments Area (SEPA), and implores the banks, regulators, and the software industry to get on with the job. It has set out ten questions for which it wants answers, and has set out a timetable for those answers.  The questions mainly require clear and unambiguous decisions at European level, but given the multi-national nature of SEPA, the collective answer requires national commitment in each country. 

The main ECB criticism is of the SEPA governance process, which is poorly resourced, lacking in clarity, and failing to involve a sufficiently wide range of interested parties.

The “Sixth progress report” on SEPA published by the European Central Bank is available here. 

The European Central Bank regards SEPA as an essential element to advance the usability and maturity of the Euro currency.  SEPA went live in Jan 2008, but only 1.5% of credit transfers within Europe are executed according to SEPA standards. 

The main points presented in the 39-page report are:

  • Banks must create greater awareness of SEPA, and must offer better products, based upon the SEPA infrastructure. Government should accelerate programs to adopt SEPA as the standard fir its disbursements.
  • The banking industry must commit to work together to remove obstacles which might compromise the Nov 1 2009 launch date of the SEPA Direct Debit. Debates on the launch date, the validity of existing DD mandates, and interchange fees must be closed out rapidly.
  • Bank systems need to be improved to enable end-to-end straight-through-processing, originated by files submitted or by e-payment, e-invoicing, and m-payments.
  • The ECB wants to see a target end date for migration to SEPA products, and for exiting out of older credit transfer and direct debit.
  • The SEPA card framework in its current form has not yet delivered the reforms which the ECB want.  In particular, ECB wants to see a European card scheme emerging.
  • The ECB perceives a lack of consistency in card standards.  It wants to ensure that a clear set of standards are adopted and promoted throughout the industry.
  • A common, high level of security for Internet banking, card payments and online payments is needed.
  • Clearing and settlement organisations in many countries have made good progress on SEPA, and several are upgrading from national to pan-European.
  • The banking industry, and its representative body, the EPC have not sufficiently involved other stakeholders.  Furthermore, the EPC itself does not have sufficient resources or support to enable it to complete its task.

The ECB has set out 10 issues which it wants to see resolved, and has set deadlines by which it wants to see responses. Deadline dates are available for download here

 

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