|
|
Also in this section: Cheques SEPA and PSD Mass payments and collections Payment cards Mobile phones/Cellphones Online micropayments Future of payment systems |
The SEPA Credit Transfer system, which was a launched on 28 January 2008, is used for fewer than 5% of all credit transfers in SEPA. In addition, for most companies, there has been little if any improvement in the pricing of payment card services in SEPA, which is a mess as the European Central Bank (ECB) keeps changing the rules. The ECB is failing to understand that payment cards are ubiquitous and continues to encourage banks to develop a Europe-only debit card. RBS recently moved from MasterCard’s Maestro card to the Visa Debit card because of its greater global coverage. As an RBS spokesman explained, “VISA Debit offers almost three times the global acceptance of Maestro, making 29 million point-of-sale outlets available to customers across the world”. Why would RBS or any other bank want to issue a Europe-only debit card? The two new SEPA Direct Debit (SDD) schemes, Core and Business2Business, launched in November 2009 unfinished and incomplete, are faring little better. The concept of a single system for collecting payments with the same conditions and mandates across 31 countries is basically sound, but Spain and France will not join until November 2010 and in most countries direct debit mandates have to be re-issued. Life assurance companies and finance companies operating across the SEPA region can see there will be real benefits when the scheme is fully operational, but that is still some time away.
Already there is serious discussion of setting a deadline for migration to the SEPA payment schemes because, according to Gerard Hartsink, chairman of the European Payments Council (EPC), speaking at the launch of the direct debit schemes last November, after 18 months the SEPA Credit Transfer scheme still only processed 4.4% of euro credit transfers. Eventually the authorities will name the day for SEPA payment schemes to replace the national schemes throughout SEPA, not just in Luxembourg as they do now.
At present most banks advise corporate customers to focus on the efficiency of their mass payments and collections in the European region as a whole, not just in SEPA, and to develop a strategy to take advantage of SEPA payment schemes when and only when it is cost-effective for them to do so. Maurice Cleaves, managing director, head of regional product management, EMEA, at Deutsche Bank, says, “The road to SEPA completion is one of evolution and not revolution, so we help our clients to make the most from SEPA wherever it is cost-effective. And we are also pushing for a new market strategy to release Europe from the legacy infrastructures and instruments to increase the use of the new SEPA infrastructure.”
Some corporate clients are already convinced of the opportunities SEPA can deliver. Michel Verholen, director of international treasury, Greif Belgium, says, “In the future the focus by treasury departments in Europe on cash pooling structures to centralize cash will no longer be necessary and, as bank accounts in different countries will no longer be needed, the next big development will be that corporates are able to consolidate the number of bank accounts they use.”
The Payment Services Directive (PSD), the legal foundation for the creation of a European Union-wide single market for payments, went live in November 2009. The PSD aims to establish a modern and comprehensive set of rules applicable to all electronic payment services in the European Union to make cross-border payments as easy, efficient and secure as ‘national’ payments within its member states. The European Commission is also seeking to increase competition by opening up payment markets to new entrants to foster greater efficiency and cost reduction.
Only 15 of the European Union’s 27 countries were PSD compliant by 1 November 2009, with even developed countries such as Sweden and Belgium missing the deadline. Further problems are arising with misinterpretations of the directive, adding to or changing the intent of the text, and problems such as sharing charges, interpreting value dates and the definition of ‘micro enterprises’. There are also problems with the inconsistent treatment of ‘PSD payments’ sent to countries not yet PSD-compliant. Many will soon be resolved but full PSD compliance across all 27 countries will probably take some years.
Some commentators believe the PSD is simply not working. In some respects, this is true, but in others it is working well. Exciting new international money transfer services are under development bringing together registered PSD payment institutions, payment service providers and leading retailer networks. These new payment products are likely to offer a level of service at a price that few, if any, of the banks and existing third party payment service providers will be able to match.
