European Payments Council Annual Activity Report 2010 confirms that self-regulation by banks ensures an efficient, stable and competitive payments market
14 March 2011 – Brussels: the European Payments Council (EPC) representing the European banking industry in relation to payments, today published its Annual Activity Report 2010. The report contains a clear message: incentivised by market demand, self-regulation by banks provides the most efficient means to create innovative, effective, secure and stress-resistant payment systems.
The payment schemes and frameworks developed by the EPC – at the request of European authorities and in close dialogue with payment service users – are key elements necessary to create the Single Euro Payments Area (SEPA). The EPC Annual Activity Report 2010 highlights further substantial progress achieved in the following areas covered by the EPC work programme.
· Updated versions of the SEPA Credit Transfer (SCT), the SEPA Core Direct Debit (SDD Core) and the SEPA Business to Business Direct Debit (SDD B2B) scheme rulebooks and related implementation guidelines were released in November 2010. The enhanced rulebooks include new mandatory and optional elements which reflect customer requirements as identified during the annual three month public consultation. The maturity of the SCT and SDD schemes was demonstrated by the limited number of requests for modifications identified during the 2010 scheme change management cycle. The scheme rulebooks contain sets of rules and standards for the execution of SEPA payment transactions that have to be followed by payment service providers (PSPs). These rulebooks can be regarded as instruction manuals which provide a common understanding on how to move funds from account A to account B within SEPA. In accordance with industry best practice, banks and their service providers have sufficient time to address the rulebook updates ahead of November 2011, when these revised rulebooks will come into effect.
· At the end of 2010, almost 4500 banks representing close to 100 percent of SEPA payment volumes offered SCT services. EU law required all banks in the euro area to be reachable for cross-border direct debits (SDD Core) from 1 November 2010 onwards. At this time, 3904 PSPs participated in the SDD Core scheme. Of those, 3374 also offered SDD B2B services.
· The EPC established the Certification Authority Supervisory Board (CASB) which handles applications from certification authorities who wish to become EPC approved in offering electronic mandate (e-mandate) services under the SDD schemes. The option to issue an e-mandate included in the SDD schemes provides an additional means of authorising direct debit collectionsi. The e-mandate option is compatible with the ‘creditor-driven mandate flow’. This is a direct debit model which relies on a mandate issued by a payer (debtor) to be sent directly to the biller (creditor). The SDD schemes are built on this model which is used in the large majority of European Union (EU) member states todayii. At the same time, the e-mandate option caters to the requirements of payers accustomed to an alternative pre-SEPA direct debit model – the ‘debtor-driven mandate flow’. Payers used to this model expect their bank to issue the mandate. The e-mandate solution is one of the many optional features included in the SDD schemes enabling banks to offer competitive SDD services and products in response to market demand.
· The EPC approved version 5.0 of the SEPA Cards Standardisation Volume – Book of Requirements. The standardisation volume is progressed by the Cards Stakeholders Group (CSG). The CSG includes representatives of the main sectors active in the cards domain including banks, retailers, vendors, processors and card schemes. The standardisation volume defines functional and security standards requirements, as well as an evaluation methodology designed to achieve interoperability based on open and free standards within the SEPA cards market. The EPC also approved the resolution ‘Preventing Card Fraud in a Mature EMViii Environment’. This resolution sets the conditions for further increased security of card payments based on the EMV chip only option and in the area of online payments with cards.
· The EPC together with the Eurosytemiv substantially advanced the creation of the Single Euro Cash Area (SECA). The aim is to establish a level playing field where basic cash functions performed by each of the national central banks in the euro area are interchangeable. The EPC’s cash repositioning strategy contributes to reducing the costs of wholesale cash distribution.
· The EPC and the GSMA, which represents the worldwide mobile communications industry, published a joint paper titled ‘Mobile Contactless Payments Service Management Roles – Requirements and Specifications’. In addition, the EPC released the ‘White Paper on Mobile Payments’. The white paper highlights the EPC’s initiatives for mobile payments in SEPA designed to facilitate implementation and interoperability of user-friendly mobile payment solutions across the 32 SEPA countries.
In the view of the EPC, payment service users are an important partner in the SEPA process. The EPC greatly appreciates the continuous dialogue taking place in the EPC Customer Stakeholders Forum (CSF) established in 2007. The CSF specifically addresses the requirements of payment service users with regard to the SCT and SDD schemes and related standards. CSF members represent a wide cross-section of interest groups acting at the European level including consumers, corporate and small and medium sized enterprises. The CSF is co-chaired by a representative of the customer organisations and the EPC.
EPC Chair Gerard Hartsink comments: “The development of payment schemes through self-regulation by banks in close dialogue with customers represents the established approach in all national banking communities – and in SEPA. This model ensures an optimally efficient, systemically stable and competitive payments market. The European Commission now seeks broad executive powers to determine payment functionalities as outlined in the European Commission’s proposal for a regulation establishing technical requirements for credit transfers and direct debits in euros published in December 2010. It is the EPC’s firm belief, however, that innovation must not be hampered by the European Commission’s intended interference. It is simply not warranted or efficient that standards should be defined and evolved by law on an ongoing basis. It is not appropriate for the European Commission to take on the role of a de-facto scheme manager and standard setter in the area of payments.”
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Notes to the Editors:
i – A mandate is signed by the payer to authorise the biller to collect a payment and to instruct the payer’s bank to pay those collections.
ii – The ratio of direct debits based on the ‘creditor-driven mandate flow’ (SEPA Direct Debit model) to those based on the ‘debtor-driven mandate flow’ in the EU today is 3:1 (source: European Central Bank Blue Book).
iii – EMV is an industry standard to implement chip and PIN security for point of sale (POS) card transactions.
iv – The Eurosystem comprises the European Central Bank and the National Central Banks of those countries that have adopted the euro.
· To download the EPC Annual Activity Report 2010, click here.
· To view the EPC response to the proposal for a regulation establishing technical requirements for credit transfers and direct debits in euros, published by the European Commission on 16 December 2010, click here.
· To learn more about SDD, download the EPC publication ‘SEPA Direct Debit for Consumers – a convenient and secure way to make payments’ here.
Media Contact at the EPC: For further media information, please contact Meral Ruesing at the EPC Secretariat (Phone +32 2 733 35 33 or e-mail meral.ruesing@europeanpaymentscouncil.eu).
About the European Payments Council:
The European Payments Council (EPC) is the coordination and decision-making body of the European banking industry in relation to payments. The purpose of the EPC is to support and promote the Single Euro Payments Area (SEPA). SEPA is an EU integration initiative in the area of payments designed to achieve the completion of the EU internal market and monetary union. SEPA is the area where citizens, companies and other economic actors can make and receive payments in euro, throughout Europe, whether within or across national boundaries under the same basic conditions, rights and obligations, regardless of their location. SEPA is currently defined as consisting of the EU 27 Member States plus Iceland, Norway, Liechtenstein, Switzerland and Monaco. The EPC develops the payment schemes and frameworks necessary to realise SEPA. In particular, the EPC defines common positions for the cooperative space of payment services, provides strategic guidance for standardisation, formulates rules, best practices and standards and supports and monitors implementation of decisions taken. The EPC consists of 74 members representing banks, banking communities and payment institutions. More than 360 professionals from 32 countries are directly engaged in the work programme of the EPC, representing all sizes and sectors of the banking industry within Europe.
Source: European Payments Council
Av de Tervueren 12 B – 1040 Brussels – Phone + 32 2 733 35 33 – Fax + 32 2 736 49 88
E-mail: secretariat@europeanpaymentscouncil.eu – URL: www.europeanpaymentscouncil.eu
