15 October 2009

ECB’s Tumpel-Gugerell:”Payments are becoming European”

There are many benefits to a harmonized retail payments market with common instruments, e.g. SEPA. As 50 % of cross-border trade of Euro countries are with each other, small to medium-sized enterprises benefit from harmonization across the national border

Tumpel-Gugerell remarked that many benefits would accrue from a harmonized retail payments market with common instruments, e.g. SEPA. As 50 per cent of the cross-border trade of euro area countries is with other euro area countries, small and medium-sized enterprises would benefit immensely from harmonization across national borders within the euro area. Also, large companies which operate in almost every European country, such as mobile phone operators, energy suppliers and petrol station chains, would gain from SEPA. For those companies, managing up to 27 bank accounts, 27 standards for electronic communication with the bank or 27 different sets of requirements for card payment terminals is a truly costly business.

She presented the following three main challenges for SEPA:

SEPA for Cards: Card payments are growing in popularity. SEPA offers tremendous opportunities for further harmonization of the use of cards, making them an even more attractive means of payment. In essence, card payments need to be positioned as a real alternative to cash: efficient, fast and guaranteed. Tumpel-Gugerell said that ECB is very pleased that progress is now being made with initiatives to create an additional European card scheme. Some businesses are even being set up close to Brussels.

SEPA migration:  The Eurosystem will continue its efforts to foster a general understanding among stakeholders that setting a realistic yet ambitious end-date for migration to SCT and SDD is a necessary step to reap the benefits of SEPA. Ten years after the introduction of the euro as the single currency, it is high time to complete the introduction of the euro in the field of single payment instruments.

SEPA governance: Improvements in SEPA governance may be needed to foster the process towards a truly integrated retail payments market in Europe. These improvements are related, in particular, to stakeholder involvement, transparency and the SEPA migration progress.

The Eurosystem – together with the European Commission – recognizes that a new, overarching body, consisting of a broad range of stakeholders, could tackle and resolve issues that are slowing the realization of SEPA. But Tumpel-Gugerell wanted to repeat that this body would not replace the current arrangements. The EPC would remain responsible for the design of payment services.

Full speech

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