Volume: 1 Issue: 1
European bank executives believe that SEPA compliance will cost them more than initially expected, according to an Accenture research study undertaken by PSE Consulting, while a study for First Data International found doubts that the compliance deadline of 2008 will be met.
The Accenture study found that 'banks are expecting to invest more money in SEPA than previously forecast, with 42 per cent of respondents expecting to spend between €11 million and €50 million on ACH-type payments, and 37 per cent anticipating expenditure of between €11 million and €50 million on card systems.' The study found that 'it is possible that the overall SEPArelated spend across all of Europe will exceed the previous highest estimate (by the Tower Group) of €8 billion.
Although thirty-nine per cent of banks and processors plan to replace legacy payments platforms, most banks and processors (62 per cent) will seek interim solutions to ensure compliance in the run up to the European Payment Council's (EPC) deadline of end-2010 for full compliance.
'It is our understanding that many banks are sceptical that SEPA harmonization will be delivered on schedule', say Dave Birch, Director of Hyperion and Peter Jones, Managing Director, PSE Consulting, writing in this issue of E-Finance & Payments Law & Policy,'unless it is backed up by legislation from the EC or linked to other more positive incentives.'
The First Data International survey, also carried out by PSE Consulting, found that while 'the great majority of banks support the SEPA guiding principle of self-regulation, over 70 per cent (of senior banking executives) expect that the European Commission will eventually legislate to ensure compliance'.
'For European regulators', the survey noted, 'there is a challenge of how to maintain pressure for change without creating the belief that regulation is inevitable and that, therefore, the industry should wait.'
The European Central Bank (ECB) last month underlined its view that Visa and MasterCard must not be allowed to be the sole players in a post-Single European Payments Area (SEPA) card market. Gertrude Tumpel-Gugerell, Member of the Executive Board of the ECB speaking at the EFMA Cards and Payments Conference in Paris, on 20 September 2006, said: "SEPA is about choice.There will be a lack of choice if SEPA ends up with only two schemes which are SEPA-compliant. In this respect, I will be very clear. The ECB would see as necessary the creation of at least another European scheme, so that the expertise and efficiency of national schemes is not wasted."