The European Payments Council (EPC), representing the European banking industry in relation to payments, has heavily criticised the EC’s plans. On 15 March, EPC’s Chairman Gerard Hartsink said: “It is not appropriate for the EC to take on the role of a de facto scheme manager and standard setter in the area of payments”.
Hartsink was referring to proposals set out by the EC in December for EU-wide end-dates for the migration of national credit transfers and direct debits to Single European Payment Area (SEPA) instruments. The EC’s plans also include a set of common standards and technical requirements that would be mandatory for all bank account payments in the Eurozone.
Hartsink said about the ‘interference’ of the EC: “It is simply not warranted or efficient that standards should be defined and evolved by law”.
“There are improvements [to the EC’s proposals] that we would want to see,” explained Michelle Whiteman, of the UK Payments Council. “We wish that the scope is set precisely”, while the European Banking Association expressed its ‘concerns’ on 24 February, in a letter to the European Commission, which pointed out ‘negative, unintended consequences’.
“I think the EPC has a point,” said Dave Birch, Consultant at Hyperion. “If the EC wants to take over standard-setting, then what was the point of the last decade?”
In December, the EC said it made the proposals ‘because self-regulation by the banks had failed, with minimal take-up of new payment instruments evident’. Birch believes “the EC should focus on competition issues [instead], because these are the way to exploit new technology to make payments services better".
The EPC, backed by most European banks, remarked in its Annual Activity Report: ‘Self-regulation by banks provides the most efficient means to create innovative, effective and secure payment systems’. Hartsink stressed that ‘self-regulation represents the established approach in all national banking communities’.
John Worthy, Partner at Field Fisher Waterhouse, believes that although “banks will be keen to avoid extra regulatory intervention on SEPA”, the EPC “may need to work hard to make the case, given the perceived weaknesses of self-regulation resulting from the financial crisis”.
Published previously in E-Finance Magazine, Michiel Willems, London 2011, Copyrights apply.