13 September 2007

SEPA success subject to incentives from regulators

Capgemini, ABN AMRO and EFMA published the third annual World Payments Report, which considers world payments trends, in particular developments towards a Single Euro Payments Area (SEPA). One of the main findings of the report is that in order to reach critical mass by the end of 2011, incentives are needed to mobilise European public administrations and corporations to adopt the new SEPA instruments.

The report’s authors analysed SEPA implementation and migration plans published earlier in 2007 for the 13 current eurozone countries and found that none expects to achieve a critical mass of SEPA payments before the agreed deadline in just over three years.

“Many domestically-focused corporations are reluctant to work towards SEPA implementation, arguing that it should be the responsibility of banks and regulators to fulfil their business requirements. Regulatory as well as business incentives are therefore vital to attract these parties to act.” said Patrick Desmares, Secretary General of EFMA.

The World Payments Report suggests that, to stay competitive in the new payments landscape, banks will need to reassess their operating models in Europe, and may choose one of three strategies –niche player, low cost producer or industry leader – and it goes on to suggest that many banks will need to outsource at least part of their payments activities.

The report reveals that 58% of banks already plan to, or are, outsourcing all or part of their payments activities in the next five years. Sixty-eight percent plan to offshore this activity as well.

Press release