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The cooperative banks in Europe serve more than 215 million customers and process a significant part of all European payment transactions. As a central bank for German cooperative banks, DZ BANK' s annual payments volume exceeds 4.5 billion transactions. With this significant portion of the whole European payment volume, DZ BANK can be considered as a representative sample of developments in European payments -- from the experience of the SEPA migration to the present state of play and to future developments. According to DZ BANK' s data, the SEPA migration followed exponential behaviour until the planned end date in February 2014. The hesitant migration can be understood as an indication of an incongruity between long-term social benefits and short-term advantages perceived by the clients. But the European market integration provided the tangible advantage, for example, for German cooperative banks to bundle transaction processing volumes, and they achieved a highly efficient operating model with two-steps of economies of scale on national and pan-European levels. The SEPA schemes fit the model of a payments ecosystem and can be described as a 'multi-sided business platform', facilitating the payment flow between consumers and merchants or employers. This description provides a chance to compare this standardised and interoperable platform (also known as SCT and SDD) with other types of business platforms, which facilitate interaction between consumers and retailers similarly. For the future, predictions forecast a tripartition of the European payments industry revenues in the three segments of standardised payment formats, cards payments and 'alternative payment methods' (the latter with the highest growth rates). Payments are reaching a crossroads as to whether a 'way beyond SEPA' can be based on the existing model or whether payments in the future will require new forms of coexistence and partnership models with vertical or horizontal integration. In a market-driven development of payments, cooperative banks have multiple opportunities -- from mobile front-end apps to back-end joint ventures and potential partnership with new dedicated clearing platforms -- as long as they continue to combine local client intimacy ('local knowledge') and added value ('services tailored to clients' needs') with efficient operating models according to the principle of subsidiarity. [ABSTRACT FROM AUTHOR]

This paper first documents the evidence showing how an efficient retail payment infrastructure enhances economic performance. It then reviews the policy tools available to promote efficient retail payments in Europe. The authors argue that, while SEPA is an important policy initiative that harmonises payment methods across the EU, it alone is not enough. Vigorous competition and consumer protection policies as well as direct interventions discouraging large-value cash payments would be particularly attractive policy tools, as they would put no strain on stretched government budgets. [ABSTRACT FROM AUTHOR]

The establishment of the Single Euro Payments Area (SEPA) for credit transfers and direct debits was finalised via Regulation (EU) 260/2012 of the European Parliament and the European Council. But without the card payment sector, the vision of a harmonised single payment market remains incomplete. A harmonised market for cards should provide a framework within which merchants in Europe can accept a variety of SEPA-compliant card brands and products, and choose from a variety of acquirers without being artificially constrained by legal, technical or procedural aspects associated with the respective card schemes. This paper focuses on SEPA Card Clearing (SCC), a project aimed at harmonisation, which is nearing completion in the acquirer-to-issuer domain. The aim of SCC is to create a new common ISO 20022 standard as an open standard (ie irrespective of a specific card scheme) for clearing and processing debit card and credit card based transactions between banks that takes into account the different market needs with respect to clearing and settling debit and credit card transactions, based on existing standards in different countries. Therefore, with SCC, a clear 'unbundling' of card schemes and processing can be achieved. This should support open and fair competition and, in so doing, lower the market entry barriers for new players. In technical terms, the SCC Framework is based on the SEPA Direct Debit (SDD) scheme and its concomitant SDD-message standards and business processes. The SCC Framework is freely available for any market participant in Europe, and it enables the use of one clearing infrastructure for all relevant payment instruments in the SEPA, direct debits, credit transfers and cards. Lastly, SCC also supports innovation. The special payment message container in SCC could also be used for the processing of any other type of payments (ie payments via mobile phone or biometric data). [ABSTRACT FROM AUTHOR]

This paper reviews the evolution of the Single Euro Payments Area (SEPA) by identifying a number of areas in relation to efficient cross-border use of SEPA credit transfer and direct debits. Many international companies would like to make use of the harmonised SEPA proposition and centralise their payments and receivables flows. For those focusing primarily on the benefits of operating on a cross-border basis, which is one of the key opportunities envisaged for the SEPA, it is important to assess the degree and detail of emerging national approaches in terms of the implementation of the ISO 20022 XML standard, the types of national or regional Additional Optional Service and the different clearing practices associated with these. Other areas, such as mandate management in the case of direct debits and creditor identifiers or the prolonged coexistence of several domestic 'niche schemes', must be taken into account by companies that operate in a number of SEPA markets. Member states, EU regulators and supervisors, and the European Payments Council continue to focus on the harmonised implementation of SEPA. In this context, the SEPA Regulation, which mandated migration to the SEPA across the Eurozone by 1st August, 2014 is a key building block, which helped to ensure the momentum for migration. With the various timelines of the migration calendar brought in by the SEPA Regulation, the path for the long-term success of the SEPA harmonisation project has been laid out. Benefits of efficiencies and cost reductions for all users, including corporates, as well as increased competition are all expected to be realised over time. [ABSTRACT FROM AUTHOR]

Results from a longitudinal study among Dutch consumers indicate that the unification of the European payments market is beginning to pay off. The similarity between payment behaviour of Dutch consumers within the Netherlands and when visiting or making a remote payment to another country in the euro area has increased during the past seven years. Perhaps even more importantly, the satisfaction of the Dutch about cross-border payments within the euro area has also improved considerably, but some consumers still experience problems with respect to ease of use, transaction speed and acceptance of their preferred payment instrument when paying abroad or paying cross-border. Such issues deserve further attention on a European scale. [ABSTRACT FROM AUTHOR]

The 1st of August marked the first step of the implementation of the Single Euro Payments Area (SEPA) in the EU. This paper discusses how SEPA benefits European banks, corporates and consumers and considers what the next steps are. [ABSTRACT FROM AUTHOR]

This paper aims to assess the EU payments framework, as implemented in France, from the standpoint of the freedom of commerce and the vitality of the payments industry, to assess whether too much emphasis has been put on general interest such as consumer protection. [ABSTRACT FROM AUTHOR]

This paper examines the European Union (EU) decision-making process around financial legislation, with a particular focus on the payment services industry. Given the plethora of regulatory requirements emanating from the EU, it is important to understand the procedures and processes that lead to legislation. In that regard, the advice of industry experts is key and, therefore, this paper explores ways of applying and sharing expert knowledge at a technical level in appropriate ways. The engagement process and opportunity to influence and shape legislation is discussed in detail, with a view to enabling improved dialogue between market participants and those responsible for developing policy at EU level. [ABSTRACT FROM AUTHOR]

Payments are essential for the functioning of the global economy and banks have done well from payments ever since the establishment of organised banking in the 15th century. Times have changed, however. New players have entered the market, some banks have abandoned payments as the rules and regulations have become more complex, and payments have increasingly been seen as a commodity, even comparable with the public good. For banks not to lose ground, they can look at smart possibilities to provide good service to their customers while dealing with limited resources. This paper suggests three opportunities: sourcing with a layered approach, with only individual processing steps in the value chain to reduce and share cost; co-strategies, managing the four Cos (connectivity, coopetition, collaboration and co-creation); and re-evaluation of products offered to achieve a good basis for a sound product line. [ABSTRACT FROM AUTHOR]

Reciprocity has always been a major consideration in the payments world, is integral to correspondent banking and, therefore, also to the way in which international payments are made. But this model is coming under direct threat from three directions. First, the model depends on large lines of credit extended by one bank to another, and these are no longer so palatable after the credit crunch. Secondly, banking regulations must increasingly be factored into deliberations that correspondent bankers could previously decide on volumes, values and fees. Thirdly, and most cogently, price and competition -- especially in the Single Euro Payments Area (SEPA) -- will all but eliminate the correspondent model and supplant it with direct use of infrastructures, but without reducing costs. That could be the worst outcome of all. Outside the SEPA, banks are hamstrung by regulation and by their tie-in to high-cost IT approaches and, indeed, to the use of one another within those models. Inside or outside the SEPA, there simply is not enough money on the table to allow generous reciprocity, and that, combined with credit and regulatory considerations, will change the correspondent discussion from a partner discussion to a buyer/supplier one. [ABSTRACT FROM AUTHOR]

This paper explores the market potential of electronic invoicing, which is expected to transform the way business and consumers exchange their bills in the coming years. When defining electronic invoicing, the paper explains why it is important to look beyond the pure exchange of electronic invoicing (e-invoicing in a strict sense), as most of the benefits for enterprises are expected from the full integration and automation of the purchase-to-pay cycle (e-invoicing in a broad sense). These benefits, which include cost savings for enterprises, time savings and additional convenience for consumers, could in a scenario of mass adoption bring considerable benefits to the EU economy as a whole. After describing the current highly fragmented einvoicing servicing landscape, with many providers competing on a wide variety of business models, the paper analyses why uptake of electronic invoicing has been modest up to now. In what follows, it develops what is ongoing at EU level to promote the uptake of electronic invoicing with particular attention to the proposed recommendations of the European Expert Group, which could create a European Electronic Invoicing Framework, where electronic invoices are legally accepted by all VAT authorities and can be exchanged in a cheap and easy way between trading parties throughout the EU. The paper explains why we are at the doorstep of this vision. First of all, a new regulatory framework is on its way, which will ensure equal treatment between paper and electronic invoices; second, the development of an international standard is proceeding; and third, initiatives to further promote interoperability between systems are emerging, ensuring that all trading parties will be enabled to reach each other. The paper closes by addressing the opportunities for service providers and banks for making e-invoicing the dominant way of exchanging bills, especially by focusing on the segment of small and medium enterprises. [ABSTRACT FROM AUTHOR]

Following the European Commission retail banking sector inquiry, the area of payments -- and multilateral interchange fees (MIFs) -- became a priority. Also, the Single Euro Payments Area (SEPA) initiative needed to be monitored from a competition perspective. Importantly, the recent (temporary)MasterCard undertakings included a MIF level meeting the exemption criteria of Article 81(3). The tourist test methodology used indicates the MIF level for which merchants are indifferent in accepting cash or cards, resulting in cardholders' choosing payment instruments efficiently, while ensuring that retailers are not faced with disproportionate fees. Transparency measures, crucial for consumers and merchants to make better informed choices about the payment means they use and accept, have also been adopted. Although the MasterCard decision was also the basis for the analysis, the recent joint statement of the European Central Bank (ECB) and the European Commission expressed the view that a general per transaction MIF does not seem necessary for the long term, providing clarity for SEPA Direct Debit to be launched on 1st November, 2009. Unlike card payments, direct debits are typically made on a regular basis, and direct incentivisation of their use is possible and already practised. In addition, many member states have cheap and widely used direct debit systems functioning very efficiently without MIFs per transaction. Hence, the economic tools and the applicability of the tourist test methodology need to be fine tuned and adapted to the payment markets realities: significant objective evidence would need to be provided, and each case assessed individually. [ABSTRACT FROM AUTHOR]

Intensifying market and price pressure forces banks to evaluate all options to reduce costs while at the same time extending their services and improving their service levels. To achieve these objectives, the outsourcing of back-office activities to industrial full-service providers is an important strategic option. In the area of payment transaction processing, the introduction of the single euro payments area (SEPA) is a trigger point forcing banks to take a decision soon about outsourcing -- or make significant investments in order to upgrade their existing infrastructure. Owing to European standardisation in the context of SEPA, payment transaction processing will be the first back-office activity in banking with a largely standardised European market. After reviewing the current situation and trends in payments processing, this paper argues that this will lead to the emergence of an efficient European payment transaction processing market, in which banks can freely choose suppliers for their payment transaction processing based on market prices as well as having clear alternatives in the market. Critical traditional objections to outsourcing will thus, in the medium term, no longer apply to payment transaction processing, so that banks can reap the benefits of outsourcing with clearly limited risks. [ABSTRACT FROM AUTHOR]

Europe-wide cashless payments are soon set to become reality with the 'single euro payments area' (SEPA). In line with plans by the European Commission and the European Central Bank, from January 2008 bank customers in all EU countries will be able to make cross-border credit transfers, direct debit and card payments as easily and securely as they already do in their home countries. This paper will also outline the viewpoint on SEPA of the Sparkassen-Finanzgruppe (group of German savings banks, Landesbankert and associated companies), who believe this transformation of cashless payment transactions must be customer-oriented -- in other words private customer-oriented too -- and improve rather than worsen the competitive landscape in Europe. As far as existing debit methods in Europe are concerned, the German banking industry views a network of competitive European systems working in collaboration with global methods as a viable solution for meeting the requirements of the SEPA Cards Framework (SCF) [ABSTRACT FROM AUTHOR]

The author comments on innovations in retail payment services, instruments and systems in Europe. Topics covered include the creation of the Single Euro Payments Area (SEPA) aimed at making cashless payments in euro from a single payment account anywhere in the euro area, the impact of innovations in information and communication technology on the retail payments industry and the challenges facing authorities and central banks in dealing with the safety and efficiency of retail payment systems.

The SEPA Instant Credit Transfer scheme created by the European Payments Council and published in November 2016 came into force in November 2017. The scheme entails an innovative, fast and convenient method of payment for an international area that will ultimately encompass over 34 European countries. However, it also brings its share of challenges for payment service providers. This paper highlights the opportunities and difficulties raised by the scheme, and encourages all payment service providers to adhere to it as soon as possible. With the support of the European payment community, the SEPA Instant Credit Transfer scheme can be a success and profoundly change payments as we know them. [ABSTRACT FROM AUTHOR]