De Nederlandsche Bank
The Single Euro Payments Area
Michael van Doeveren
Conference Financial Sector of Macedonia
on Payments and Securities Settlement
Systems
Ohrid
25 June 2008
De Nederlandsche Bank
Eurosysteem
Agenda
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What is SEPA?
Why SEPA?
How to realise SEPA?
Impact of SEPA
Uncertainty, concerns and benefits
Migration
Closing remarks
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What happened before…..
Interaction public sector and banks:
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1990 EC paper ´Making payments in the internal market´
1992 EC paper ´Easier Cross Border Payments – breaking the barriers
1997 EC Directive cross border payments
1999 ECB ´Improving cross border retail payment services´
1999 introduction euro
2001 Bolkestein regulation (2560/2001)
2001 ECB ´Towards an integrated infrastructure for credit transfers in
euro´
2002 introduction euro coins and banknotes
2002 start EPC
2005 EC concept Payment Services Directive
2006 EPC agreement SEPA Rulebooks and Frameworks
… 2008-2010 SEPA…and going on
De Nederlandsche Bank
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What is SEPA?
Single
 Euro
 Payments
 Area
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De Nederlandsche Bank
Eurosysteem
De Nederlandsche Bank
Eurosysteem
What is SEPA?
Political vision:
The euro area will be an internal ´domestic´
market for retail payments generate scale
economies and promoting competition
Concretely:
European payment instruments for both
cross-border and domestic payments in euro:
credit transfers, direct debit and cards
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Why SEPA?
European Politics

Improvement European economy: Lisbon agenda
Economics
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Internal market: volume and competition
Banks
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To prevent ‘further regulation’ after Regulation
2560/2001
Especially Cross-border banks can profit from new
market circumstances
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The European payment market currently
België
Belgium
Belangrijkste marktpartijen en betaalmiddelen:
Duitsland
Austria
Belangrijkste marktpartijen en betaalmiddelen:
Belangrijkste marktpartijen en betaalmiddelen:
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
Consumenten
Winkeliers
Bedrij-ven
Currence:
Consumenten
Winkeliers
Bedrij-ven
Currence:
Bank B
Bank C
Acceptgiro
Interpay
Overige
processoren
Griekenland
Greece
Bank A
Bank B
Bank C
Interpay
Consumenten
Bedrij-ven
Currence:
Bank B
Bank C
Acceptgiro
Consumenten
Interpay
Nederland
Netherlands
Belangrijkste marktpartijen en betaalmiddelen:
Bedrij-ven
Currence:
Bank A
Bank B
Bank C
Consumenten
Interpay
Bedrij-ven
Currence:
Winkeliers
Bedrij-ven
Currence:
Bank B
Bank C
Acceptgiro
Bank B
Bank C
Interpay
Overige
processoren
Acceptgiro
Interpay
Overige
processoren
Aanbieders van
betaaldiensten:
Bank A
Bank B
Bank C
Currence:
Incasso
PIN
Chipknip
Interpay
Overige
processoren
Currence:
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
Consumenten
Winkeliers
Bedrij-ven
Aanbieders van
betaaldiensten:
Bank A
Bank B
Bank C
Currence:
Incasso
Incasso
PIN
Aanbieders van
betaaldiensten:
Bank A
Bank B
Bank C
Acceptgiro
PIN
Chipknip
Interpay
Verwerker van
betaaltransacties:
Overige
processoren
Interpay
Overige
processoren
Spanje
Spain
Belangrijkste marktpartijen en betaalmiddelen:
Beheer van
betaalmerken
Consumenten
Winkeliers
Bedrij-ven
Currence:
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
Consumenten
Winkeliers
Bedrij-ven
Aanbieders van
betaaldiensten:
Bank A
Bank B
Bank C
Currence:
Incasso
Incasso
PIN
Aanbieders van
betaaldiensten:
Bank A
Bank B
Bank C
Acceptgiro
PIN
Chipknip
Verwerker van
betaaltransacties:
Interpay
Acceptgiro
Chipknip
Portugal
Afnemers van
betaaldiensten:
Acceptgiro
Luxemburg
Luxembourg
Bedrij-ven
Chipknip
Verwerker van
betaaltransacties:
Bedrij-ven
Belangrijkste marktpartijen en betaalmiddelen:
Winkeliers
PIN
Bank A
Chipknip
Verwerker van
betaaltransacties:
Consumenten
Incasso
Aanbieders van
betaaldiensten:
Winkeliers
Verwerker van
betaaltransacties:
Belangrijkste marktpartijen en betaalmiddelen:
PIN
Bank A
Overige
processoren
Beheer van
betaalmerken
Consumenten
Consumenten
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
Oostenrijk
Germany
Afnemers van
betaaldiensten:
Acceptgiro
Italië
Italy
Verwerker van
betaaltransacties:
Overige
processoren
Belangrijkste marktpartijen en betaalmiddelen:
Winkeliers
Interpay
Chipknip
Incasso
Aanbieders van
betaaldiensten:
Acceptgiro
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
Chipknip
PIN
Aanbieders van
betaaldiensten:
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
Bank C
Incasso
Verwerker van
betaaltransacties:
Overige
processoren
Bank B
Belangrijkste marktpartijen en betaalmiddelen:
Winkeliers
Chipknip
Verwerker van
betaaltransacties:
Bank A
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
PIN
Bank A
Currence:
PIN
Aanbieders van
betaaldiensten:
Verwerker van
betaaltransacties:
Belangrijkste marktpartijen en betaalmiddelen:
Winkeliers
Bedrij-ven
Incasso
Ierland
Ireland
Incasso
Aanbieders van
betaaldiensten:
Acceptgiro
Overige
processoren
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
Winkeliers
Chipknip
Verwerker van
betaaltransacties:
Belangrijkste marktpartijen en betaalmiddelen:
Consumenten
PIN
Aanbieders van
betaaldiensten:
Chipknip
Verwerker van
betaaltransacties:
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
Incasso
PIN
Bank A
Frankrijk
France
Belangrijkste marktpartijen en betaalmiddelen:
Beheer van
betaalmerken
Afnemers van
betaaldiensten:
Incasso
Aanbieders van
betaaldiensten:
Finland
Overige
processoren
Acceptgiro
Chipknip
Verwerker van
betaaltransacties:
Interpay
Overige
processoren
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The European payment market – future
(SEPA)
Main market participants and payment products:
Management entity for
payment products
Users of
payment
services:
Consumers
Retail
Companies
(incl
government)
Manager (SME)
Credit Transfer
Direct Debit
Providers of
payment services:
Payment
transactions
processor:
Bank A
PEACH
Bank B
ACH
Bank C
Bilateral
Master
card
VISA
Euro
Alliance
?
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How to realise SEPA?
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Self-regulation: European Payment Council of
banks develops standards and products
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Payment Services Directive: legal
harmonisation
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EPC Technical harmonisation
Two kinds of agreements in EPC:
1. About interbank processing:
 Credit transfer rulebook
 Direct debit rulebook
2. Restructuring of the market:
 SEPA Cards-framework (SCF)
 Clearing & Settlement Framework
 SECA
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EPC Roadmap 2004-2010
Three phases
1. 2004-2006 Design and preparation (EPC)
2. 2006-2008 Implementation and organisation
3. 2008-2010 Dual period of gradual migration
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SEPA Programme
Design & preparation
Design & specification
1
Implementation &
deployment
implementation
pilots
2
launch
early adopters
Co-existence & gradual
migration
Programme activities
national migration
programme management, planning, communication, monitoring
Milestones
1
2
- SEPA instruments available in market
- Critical mass migrated/SEPA irreversible subject to the commitment of all stakeholders
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Milestones
Credit transfer and Direct debit
 European Rulebooks are the basis for products of
the banks
 Framework for clearing and settlement
 Credit transfers from 28 January 2008 on
 Direct debit from end 2009 on
Cards
 SEPA Cards Framework
 After 2010 only SEPA-cards
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Role public sector
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SEPA is a project banks: self-regulation via EPC
However…
 European Commission
 Payment Services Directives
 Public users are the early adopters
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Eurosystem: catalyst role
 5th Progress report July 2007
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Legal harmonization: Payment
Services Directive
Content:
Proportional supervisory regime for nonbank payment service providers
Transparency requirements
Rules about the relationship of the payment
service provider and user
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Role of NCBs
To ensure a smooth migration to SEPA
 Self-regulation: banks are in the lead
 Policy development and monitoring in the
Eurosystem
 Monitoring national implementation
 Organizing stakeholder involvement (e.i.
Consulting group SEPA NL)
 Analysis, communication and planning
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Trends in payments in the EU
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Potential for SEPA compliancy NL
Non SEPA Compliant
instruments
9%
SEPA Credit Transfers
29%
SEPA Cards
36%
SEPA Direct Debits
26%
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Impact of of SEPA
Consumers
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Use IBAN and BIC
Use of cards in the whole SEPA area
Firms (private and public)
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Easier cash-management and administration
Standard formats (ISO 20022 XML)
Use of IBAN and BIC
Centralisation of accounts and direct debits
Retailers
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More choise: terminal, acceptance of brands, acquiring
Banks
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Change of markets, new products, new systems
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Hurdles!
Uncertainties:
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No concrete products offered!
Legal framework in preparation
Concerns:
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User adoption of SEPA products
Price development (cards!)
Maintaining existing efficiencies
Continuity of payments
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Benefits of SEPA
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Efficiency, level playing field and transparency
lead to cost benefits for society in the long run
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Reduction costs for average user of payment
services in Europe
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Comfort/User-friendliness
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Innovation
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Migration
Aim: a smooth migration to SEPA
 To organise nationally
 Market driven
 Speed can differ between countries
 Stakeholder involvement and communication are
important tools for success
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Transition plan of the Netherlands
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Objective: an orderly and efficiently change
over from domestic payments to SEPA
Scope: all existing payment instruments
Consequences and choices for different
stakeholders
Market driven migration
Identifying barriers and changes
Mid 2009 evaluation of the migration and
choice about phasing out domestic
instruments
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Points of concern SEPA
National Forum on the Payment System
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Price developments
Range of options open to consumers and retailers,
caterers and other regarding debit card brands
User-friendliness of migration to IBAN and BIC
Safety of SEPA direct debit
Prolongation of direct debit contracts and mandates
Standardisation in the Bank-client domain
Interbank Swich support service
Dispute handling
Accessibility of the noncash payment system
Consultation process
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Fifth SEPA progress report
Eurosystem July 2007 (messages)
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Complete Clarity needed on all features of SEPA
Direct Debit by December 2007
Further card standardisation is vital
Need for one additional European Debit card scheme
Co-branding can help card schemes to gain the time
needed for the development of a long-term strategy
Infrastructures should comply with SEPA-compliance
criteria
Security of SEPA payment instruments needs to
receive more attention
Reachability is the key
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Closing remarks
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The first phase of SEPA (SCT) was introduced
succesfully on 28 January 2008
SEPA will transform the European landscape
SEPA is good and has benefits for all users!
But cost come first…
Implementation and transition will be planned
carefully
User involvement has to be stimulated
SEPA is the start for new developments: e-invoicing,
e- and m-payments etcetera
De Nederlandsche Bank
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