In March 2004, the European Payments Council, driver of the pan-EU SEPA (Single Euro Payments Area) initiative, defined its goals for 2004, which include the consolidation of the past two years’ work. Although the SEPA project is not expected to reach conclusion before 2010, it aims to render payments within Euroland as domestic payments in terms of costs, security and ease of use. By 2010, Europe is expected to include 452 million SEPA consumers initiating over 100 billion non-cash payments a year, but for transparency, cross-border retail payment infrastructures need to be facilitated under joint initiatives.

The EPC, which launched in June 2002, is now recognized by the European banking industry and entities such as the EC, the ECB and the European System of Central Banks, the regulator of retail payment issues. SEPA currently has four payment instrument working groups, namely Cards and Cash, Electronic Direct Debit Payments and Electronic Credit Transfers, which will standardize SEPA transactions. During 2004, the EPC will evolve its pan-European direct debit (PEDD) system, define e- and m-payments within SEPA, define anti-card fraud measures and work with central banks to facilitate cross-border payments.

As Die Bank observes, “the European financial industry is now obliged to prove that it can maintain” or accelerate the progress made by the EPC in driving the SEPA project. Two major achievements of the EPC include the Credeuro Convention for basic bank-to-bank intra-EU transfers and the Interbank Charging Principles Convention, which defines charges for basic euro-denominated STP (straight-through processing) credit transfers. From January 2006, the SEPA will have an industry-wide rejection policy for non-compliant intra-EU credit transfers so as to accommodate future growth in credit transfers.

(Die Bank)