SEPA clarification welcomed

European Payments Council issues clarification of Sepa payment cards scheme

BRUSSELS – The European Commission and the European Central Bank (ECB) have welcomed further clarification from the European Payments Council (EPC), the association of banks and banking associations that is setting up the Single Euro Payments Area (Sepa).

In the document, published in question-and-answer format, the EPC clarifies key aspects of compliance with the Sepa Cards Framework (SCF) for payment card schemes and banks, as well as the conditions for geographical coverage of card schemes within the Sepa. It hopes this will facilitate the transition from the existing fragmented and monopolistic national payments markets towards a competitive, Sepa-wide, payment cards market.

The Sepa is a unique initiative of the European banking industry to move from 31 national payment systems towards an integrated euro payments area. Once Sepa is a reality, Europeans will be able to make payments and cash withdrawals in euros throughout the Sepa area as easily as in their home country.

One of the most pressing issues concerns the rules for migration of cards to Sepa. Unlike the comprehensive rulebooks for credit transfers and direct debits, the SCF does not outline any detailed rules and standards, but rather describes three options for attaining Sepa compliance. Market participants seemed to interpret these three options in a way that meant a card scheme is only SCF compliant if it covers all 31 states of the Sepa territory.

The European Commission and the ECB are satisfied by the EPC’s confirmation that – in the context of geographical coverage – compliance with the SCF only requires that cards be technically and commercially capable of being accepted everywhere in the Sepa territory. Therefore, any scheme, even an efficient national scheme, will be able to become SCF compliant, provided that – among other requirements – it is technically and commercially capable of admitting banks from other Sepa countries.

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