Brussels, 07/12/2005 (Agence Europe) - The draft directive on creating a Single Euro Payment Area (SEPA), unveiled on 1 December by the European Commission, has been broadly welcomed by the European banking industry with a few recurring criticisms.
The European Association of Public Banks (EAPB) broadly supports the creation of a legal framework for payment services but warns about over-regulation. Henning Schoppmann, Secretary General of the EAPB, explains in a press release: “The common framework should concentrate on areas in which a true need exists for regulation at Community level. Such a need is only present if national regulations hinder the payments sector to create a Single Euro Payments Area or if they distort competition.” The EAPB rejects any rules introducing additional obligations and requirements for the banking industry: 'The proposed mandatory execution time of only one banking business day following the point in time of acceptance for payment transactions without any currency conversion interferes with competitive market structures and is not acceptable for the EAPB,' (see EUROPE 9080). Schoppmann: “At present, such a short execution time is not realistic and does not take all existing cross border infrastructures into account. The mandatory execution time would require enormous adjustments and investments…. Only payments within the EU and in EU currencies can be regulated by the EU.”
The Banking Federation of the European Union (BFE) says the European Commission's final proposal is much clearer than earlier versions and the BFE would now be carefully reviewing the measures to see whether they are a move in the right direction and help meet the needs of EU citizens. The French banking federation is far more critical, although it too welcomes the draft payments directive. In a press release, it points out that some of the recommended practices already happen in France, like prior information on fees, irreversible payments and no fees for signing contracts, but it says various areas have to be improved, like the coexistence in the European Commission's plans of two systems, at banks and new payment bodies, creating confusion for the consumer, argues the French group, claiming the consumer would have different levels of security according to the player they chose. Another area of criticism - the deadline for cross-border transactions, described as 'unrealistic' because it is said to be impossible to process the full payment chain in one day and ensure the synchronisation of transactions on paper throughout Europe.
EuroCommerce, representing international trade (both wholesale and retail) in Europe, said the draft directive was a good compromise and its implementation would help create greater transparency, greater competition and greater efficiency in the market to the benefit of consumers and retailers alike.
The European Consumers' Organisation BEUC said the draft directive was long awaited good news, and welcomed the obligation to credit the beneficiary's account with the entire sum transferred by the payee. Consumers would no longer suffer the double whammy of paying charges twice on a single cross-border bank transfer and the one day deadline would be beneficial to consumers. Jim Murray, BEUC Director, said the draft directive was a step in the right direction although it was not entirely perfect and further improvements were still required.