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| Moreno |
Following last month's article (‘payments reform under pressure’), Michiel Willems spoke to Dr. Nathalie Moreno, Partner at Speechly Bircham, about the impact of the Eurocrisis on the progress of the Single European Payments Area (SEPA).
What is the impact of the current economic climate/Eurocrisis on SEPA? Is SEPA ‘on hold’?
Opinions vary depending on the perception of the raison d’être of the European Union - some view the Eurocrisis worsening as a result of the absence of SEPA and there are others who are more cautious of the concept of establishing SEPA due to the uncertainty of the economic climate. As the markets fragment more it is difficult for many to reconcile a unified approach to enable efficient cross border payments. The current approach seems to be to carry on with the same plans as before the Eurozone crisis hit and build on this fragmented market. In my opinion, there are no current measures in place to note that seem to have taken on board the impact of the crisis.
Do you think the migration deadline of spring 2014 is still realistic?
It is hard to see the deadline of spring 2014 not being moved. The Eurocrisis is developing at such a rate in 2012 that nobody can predict what will happen, and the impacts of increased lending and bailouts to keep the Euro afloat will surely affect the ability of these economies to make a certain decision on the future of SEPA. SEPA’s focus is on payment harmonisation and modernisation but with all the turmoil of the Eurozone as a whole it is difficult to see how this can be kept a reality without the need for new and added thoughts on SEPA’s development process which keep up with key market developments.
What is the role of the European Green Paper, which called for an integration of card, mobile and online payments? What do you think of the Green Paper and its future in the current political, economic and regulatory climate?
The European Payments Council called the EU Green Paper “controversial”, because some of the Paper’s suggestions imply more costs for the industry at a time when huge regulatory costs are sweeping banks. Many would argue that the approach for an integrated market for card, internet and mobile payments has at its forefront the interests of the consumer. The driving down of costs of payments and increased convenience for consumers are after all the key benefits of market integration and greater benefit the consumer than the industry itself. There is a worry that regulatory intervention could hamper the banking sector’s competitiveness in the global marketplace and also lead to the lack of development and innovation in this space. However, some would argue that looking into and improving the ease of market access and entry of new players is beneficial to companies looking to enter the market. This would benefit many companies that are not banks as it will focus on the banks’ monopoly of deposits and restricting access of information to these deposits. This area is rapidly developing and in the current economic climate many would argue that increased benefits to the consumer can be seen as a step forward for the banking sector to address the interests of their customers. The cost of change may be high now but may impact the sector with better financial terms in the future.
What about the impact of SEPA on the public sector?
The impact of SEPA on the public sector is something that should be explored more fully. SEPA’s objective to harmonise electronic payments within the Eurozone will greatly impact public sector organisations, helping to simplify payment and increase efficiency. In uncertain times like these, where many public sector organisations are facing budgetary cuts from their Member State governments, the benefits to this sector will be of great interest. The banking sector are preparing for the change by forming project teams to assist organisations with impact assessments to meet the required SEPA standards and the changes ahead. These are all topics that could be highlighted to this sector to increase awareness of how to meet their requirements and how these requirements could benefit them.
What is the impact of the current economic climate/Eurocrisis on SEPA? Is SEPA ‘on hold’?
Opinions vary depending on the perception of the raison d’être of the European Union - some view the Eurocrisis worsening as a result of the absence of SEPA and there are others who are more cautious of the concept of establishing SEPA due to the uncertainty of the economic climate. As the markets fragment more it is difficult for many to reconcile a unified approach to enable efficient cross border payments. The current approach seems to be to carry on with the same plans as before the Eurozone crisis hit and build on this fragmented market. In my opinion, there are no current measures in place to note that seem to have taken on board the impact of the crisis.
Do you think the migration deadline of spring 2014 is still realistic?
It is hard to see the deadline of spring 2014 not being moved. The Eurocrisis is developing at such a rate in 2012 that nobody can predict what will happen, and the impacts of increased lending and bailouts to keep the Euro afloat will surely affect the ability of these economies to make a certain decision on the future of SEPA. SEPA’s focus is on payment harmonisation and modernisation but with all the turmoil of the Eurozone as a whole it is difficult to see how this can be kept a reality without the need for new and added thoughts on SEPA’s development process which keep up with key market developments.
What is the role of the European Green Paper, which called for an integration of card, mobile and online payments? What do you think of the Green Paper and its future in the current political, economic and regulatory climate?
The European Payments Council called the EU Green Paper “controversial”, because some of the Paper’s suggestions imply more costs for the industry at a time when huge regulatory costs are sweeping banks. Many would argue that the approach for an integrated market for card, internet and mobile payments has at its forefront the interests of the consumer. The driving down of costs of payments and increased convenience for consumers are after all the key benefits of market integration and greater benefit the consumer than the industry itself. There is a worry that regulatory intervention could hamper the banking sector’s competitiveness in the global marketplace and also lead to the lack of development and innovation in this space. However, some would argue that looking into and improving the ease of market access and entry of new players is beneficial to companies looking to enter the market. This would benefit many companies that are not banks as it will focus on the banks’ monopoly of deposits and restricting access of information to these deposits. This area is rapidly developing and in the current economic climate many would argue that increased benefits to the consumer can be seen as a step forward for the banking sector to address the interests of their customers. The cost of change may be high now but may impact the sector with better financial terms in the future.
What about the impact of SEPA on the public sector?
The impact of SEPA on the public sector is something that should be explored more fully. SEPA’s objective to harmonise electronic payments within the Eurozone will greatly impact public sector organisations, helping to simplify payment and increase efficiency. In uncertain times like these, where many public sector organisations are facing budgetary cuts from their Member State governments, the benefits to this sector will be of great interest. The banking sector are preparing for the change by forming project teams to assist organisations with impact assessments to meet the required SEPA standards and the changes ahead. These are all topics that could be highlighted to this sector to increase awareness of how to meet their requirements and how these requirements could benefit them.
Michiel Willems © 2012 CP Publishing Ltd. Pictures: Conservativs.com / Blackburnlife.com
