FRANKFURT - The European Central Bank (ECB) has released urgent concerns over timetabling, competition and direct debits within the Single Euro Payments Area (Sepa). The ECB's sixth progress report is the latest setback for Sepa - already subject to delay, added costs and compromise over direct debit fees.
The first area the ECB says must be addressed "without delay" is the launch deadline for rolling out Sepa direct debits by November 1, 2009. The ECB says the issue of multilateral exchange fees for direct debits must be resolved as soon as possible, with more regulatory clarity on the launch date and existing mandates.
These worries are compounded by general concerns that more measures are needed to encourage the transition to Sepa of direct debits and credit transfers by European banks. The ECB has called for a new "realistic, but ambitious end date" for Sepa.
The European banking industry stands accused of dragging its feet in implementing Sepa - legislated through the Payment Services Directive (PSD). Several industry studies have already commented on the possible high budgetary costs of implementing the switchover - contrary to European Commission claims that the PSD will save billions of euros through greater efficiency and harmonisation.
The need to develop a European debit card project to rival the MasterCard Maestro system is another ECB concern. This has become an EU cause célèbre since the European Commission's order last year for MasterCard to cut cross-border direct debit fees and its attempts to foster the creation of an ECB-led rival to the US Visa-MasterCard duopoly. Jean-Michel Godeffroy, the ECB's director general for payment systems, has described the status quo as "not enough".
Banks are tasked with improving consumer communications, especially in developing clear product information. There is also a need for publicly run administrations to become early Sepa adopters. Banks must also bring new product offerings such as mobile and online banking initiatives under Sepa, rather than restricting implementation to traditional banking services. Only then, says the ECB, will smooth end-to-end straight-through processing be possible.
The ECB press release is available to download here.
The ECB progress report is available to download here.