Delays and confusion threaten Sepa

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LONDON – A study of 22 banks across the EU and EEA has revealed delays, confusion and national disparities in the implementation of the Payments Services Directive (PSD) could have severe and detrimental effects on the progress of the Single European Payments Area (Sepa).

The study, conducted by IT and business services company Logica and supported by the IBOS Association, questioned European banks on the implications of PSD transposition for their business and compliance planning programmes in payments and cash management. It revealed the timing and effect of national transposition is not clear across the EU, and that national variations of PSD might even put Sepa progress into reverse. In the majority of communities, such as Spain, the regulators have still to create and identify their transposition schedule and law making.

More than two-thirds (67%) of respondents answered they know only approximately when the PSD will go into their local statute books. In most cases, the date was given in the responses as November 1, 2009, or the date the PSD comes into force internationally.

Banks from the UK, Germany and Hungary stated the PSD will become a law in their jurisdictions by the end of the fourth quarter, 2008. Banks in Slovenia and Sweden will have PSD in the local law at the end of Q2 2009.

The research revealed that, while banks are clear who covers their representations to national governments in each country – either the National Banking Association or the central bank – it is not clear how consistency of the final version of the laws enacting PSD can be achieved across countries.

Simon Bailey, director of payments at Logica, says: “This issue is especially crucial when the implementation process has a national perspective, as in the case of Sepa migration. Variations in PSD taken together with possible community-defined variations in the Sepa schemes would entrench national differences – the opposite of what Sepa aims to achieve.”

The study also revealed that the pressure of PSD compliance has already been applied to the programme portfolios in banks. All respondents reported the PSD impact on their ‘Sepa project/programme’.

Bailey continues: “Looking at the correlation of the impact on the ‘Sepa programme/project’ and the PSD implementation timeline, we can conclude the implementation for Sepa may take national flavours ‘strengthened’ by the derogations in local versions of PSD. If this happens, it will further compartmentalise national payment systems and work against the concept of one Sepa.”