SEPA: The role of the Eurosystem
One of the Eurosystem’s basic tasks is to promote the smooth operation of payment systems. The legal basis for the Eurosystem’s competence in the area of payment systems is contained in the Treaty on the Functioning of the European Union. According to the Statute of the European System of Central Banks and of the European Central Bank, "the ECB and the national central banks may provide facilities, and the ECB may make regulations, to ensure efficient and sound clearing and payment systems within the Union and with other countries".
The Eurosystem uses its expertise as well as contacts with the private sector and other public authorities to improve overall market efficiency. The Eurosystem is keen to help the industry find safe and effective payment, clearing and settlement solutions for the euro area. An important example of the Eurosystem’s catalyst work is its contribution to the creation of the Single Euro Payments Area (SEPA).
Why is the Eurosystem involved in SEPA?
Since 2002 it has been possible to make all cash payments throughout the euro area using a single currency. Likewise, it should also be possible to make non-cash euro payments using a single set of payment instruments, both within and across borders. SEPA will achieve this.
By harmonising the way non-cash euro payments are made, SEPA will promote the smooth operation of payment systems. In addition, SEPA will complete the introduction of the euro as the single currency of the euro area and enhance the efficiency and competitiveness of the European economy as a whole. All this explains the strong interest that the Eurosystem has in SEPA.
Active support of SEPA
The Eurosystem supported the development of SEPA by:
Through speeches and publications, such as the SEPA progress reports, the Eurosystem provides a continuous assessment of the progress made and draws attention to the issues that need further work. In addition, the Eurosystem offers guidance to the market whenever it is needed by clarifying specific issues.
The Eurosystem participates in the working groups of the European Payments Council (EPC), organises its own events and fora, and participates in external events to make sure that the needs of all stakeholder groups – consumers, retailers, companies, payment service and infrastructure providers, etc. – are taken into account. The ultimate aim, since the start of the project, has been to ensure that the resulting retail payment market is in the best interests of the European Union.
The Eurosystem considers it important to keep all stakeholders informed in a timely, transparent and consistent manner. In order to reduce the risk of misunderstandings that is naturally present in such a big project, the Eurosystem helps to coordinate the communication strategy:
- at European level: the Eurosystem, the European Commission and the EPC closely coordinate their communication activities.
- at national level: all euro area countries have set up coordination bodies. These bodies consist mainly of representatives from the national governments, national banking associations, end-user organisations and the national central banks. Their purpose is to ensure the implementation of SEPA by keeping all participants fully informed and preparing them for SEPA.
The faster the new instruments and services are adopted, the earlier the benefits of SEPA can be reaped. Therefore, the Eurosystem seeks to foster the use of the SEPA payment instruments by encouraging their adoption by big senders and receivers of payments, such as corporations or the public sector. In addition, it encourages the market to develop and offer value-added services to fully exploit the benefits of SEPA and, as a consequence, make it more attractive to the users of payment services.
Other European stakeholders and contact groups
The EPC is the coordination and decision-making body of the banking industry in relation to payments. The purpose of the EPC is to support and promote the Single Euro Payments Area (SEPA) . The EPC develops payment schemes and frameworks which help to realise the integrated euro payments market. In particular, the EPC defines common positions for the cooperative space of payment services. EPC members represent banks, banking communities and payment institutions.
The Eurosystem takes part in the meetings of the EPC Plenary and most of its working groups as an observer. In close dialogue with the stakeholder community, the EPC develops, among other things, the SEPA payment schemes as defined in the rulebooks for SEPA credit transfers and SEPA direct debits. The rulebooks contain sets of rules and standards for the execution of SEPA payment transactions that have to be followed by adhering payment service providers. The schemes are based on technical standards defined by standards bodies such as the International Organization for Standardization. The SEPA payment schemes developed by the EPC have open access criteria.
The CSG was created in 2009 in order to address the needs for standardisation in the field of card payments. The group has representatives of the five most relevant sectors in the field of cards: payment service providers (represented by the EPC), card schemes, processors, vendors and retailers. The CSG is currently co-chaired by the chair of the EPC Cards Working Group and a representative from the retail sector. EMVCo and PCI SSC as well as the ECB and the European Commission (DG Internal Market) are invited as observers and participate in the development of requirements for cards standardisation in Europe.
The balanced and overreaching representation of the relevant stakeholder sectors in the field of cards standardisation makes the CSG a very important body to get to a technical environment in which cards and terminals are fully interoperable within the whole SEPA.
For examples of European associations of users, please see the composition of the ERPB.
The Payments Committee (PC) is composed of representatives from EU countries. It helps with the adoption and implementation of the measures outlined by the Payment Services Directive (PSD) and various other issues linked to payments.
The Payment Systems Market Expert Group (PSMEG) is composed of market representatives from both the supply and the demand side. The PSMEG helps with preparing and implementing legislative acts or policy initiatives in the field of payments.