SEPA Cards Framework Approved By The EPC
Last month, the European Payments Council approved the SEPA Cards Framework, which means banks in SEPA countries can evaluate the points with a view to compliance by January 2008. Many banks want SEPA compliance to progress quickly, but in the past 12 to 18 months postponed key investments in their cards businesses so as to draft the best possible SEPA strategy. Since technology investment cycles typically run at 10 to 15 years and involve hundreds of millions of euro, SEPA banks are keen to achieve legal certainty before proceeding.Under the EPCÆs vision, SEPA will benefit EuropeÆs card markets by allowing consumers to use general purpose payment cards in any other SEPA country, just as they do in their home country. From 2008, a single market for card payments will be established, implying that multinational card issuers will gain cost savings from achieving economies of scale across several markets. In other words, banks operating in different countries will have an æopenÆ environment with a cross-border legal framework, but obviously a level playing field has to be created in all participating countries.
Euro-denominated card payments will have to be accepted at any ATM or POS terminal in the SEPA area, with universal rules in effect everywhere. All card payments will be EMV compliant and while countries such as the UK and France have largely completed their EMV migrations, others, such as Germany, are not as advanced. In SEPA countries, the fragmented clearing and settlement systems will have to be rationalized to support SEPA objectives, which is a huge task affecting over 3,000 banks from 12 (current EU member) countries and multiple clearing schemes. Related Links:
EMV Is SEPAÆs Preferred Payment Card Standard
SEPA Compliance Costly But Beneficial To Banks
Europe's Banks Must Revamp Payments For SEPA
