Tag: Single European payments area

While the EU admits its plan to create a Single Euro Payment Area (SEPA) across Europe will take longer than expected, consumer and banking groups argue that the scheme needs to be revised before it is rolled out any further.

An agreement between two major industry players has brought Europe a step closer to using mobile phone technology for direct payments.

Visa Europe said it was ready to negotiate lower fees on card payments made across EU borders in a move aimed at avoiding antitrust measures from the European Commission.

By the end of 2008, direct automatic debit payments such as mortgage instalments should cost the same across the EU, regardless of whether they are carried out within a member state or involve a cross-border transaction inside the European Union.

In the European single market there are still large differences between the national payment systems. The EU seeks to remove these obstacles and reduce the costs to cross-border payments for consumers by creating a Single Euro(pean) Payments Area (SEPA). The European Payments Council (EPC) was set up to develop a common infrastructure and standards. However, there is only little progress, since banks are reluctant to apply standards and fear competition being opened up to non-banks, which makes it difficult to reach the 2010 target. Therefore, the Commission has laid out a common legal framework in its 2005 proposal.

In a long-awaited decision, the Commission has ruled against MasterCard's interchange fees, saying they violate EU rules on restrictive business practice and "act like a tax on consumption".

The European Parliament has adopted rules for a European-wide payment-services system, aiming to make cashless payments using devices such as mobile phones cheaper and easier and pave the way for a single EU payments area by 2010.

With a Commission decision on fees for credit-card operations expected by the end of the month, Visa Europe warned that the possible abolition of fees could lead to higher costs.

While finance ministers are still debating the proposal for a directive on the the legal framework for a single European payment market, the banking sector is calling for more certainty. At a conference stakeholders pointed out the challenges, as well as opportunities, of SEPA.

Internal Market Commissioner McCreevy has warned member states that they will face enforcement consequences if financial services legislation is not promptly transposed.

The Commission has published a consultative paper inviting comments on the best way forward to a single European payments area (SEPA).