SEPA Redux: Understanding How We Got Here

by Gareth Lodge, October 6, 2011
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

SEPA is finally on the verge of coming into its own, but significant parts of the banking community either have forgotten or do not understand what SEPA is trying to achieve.

In this report, SEPA Redux: Understanding How We Got Here, Celent revisits why SEPA matters and how its future may play out. Many forget that SEPA is as much a set of principles as it is one specific thing. Indeed, SEPA is not just new payment types; it’s about rebuilding the payments business from the ground up to create competition at all levels of the business.

“In order to create competition, there is active intervention into the market, either directly or indirectly, by the regulator,” says Gareth Lodge, Senior Analyst at Celent and author of the report. “As a result, for banks, doing nothing is simply unlikely to be the answer.

In effect the regulator is made up of 20 distinct directorate generals, each with its own area of focus, so there is often conflict and contradiction from the regulator. In addition, there is the complicating element that they are trying to achieve political goals rather than delivering business benefits for all. As a result, some actions have some unintended consequences which aren’t always immediately obvious.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

SEPA—Enough Already!

5

Back to Basics: What SEPA Is Really About

7

 

Who’s Who?

9

Creating Esperanto for European Payments

11

 

Scheming Schemes?

11

 

A Common Legal Framework

13

Are We There Yet? Will We Ever Be?

15

The Reason for Current Levels of Adoption

18

 

Multinational Banks

18

 

Big National/Regional Banks

20

 

Small and Medium-Size Banks

21

Unintended Consequences?

23

Oh, and Cards Too

26

 

Transparency of Fees in Cards

27

 

A Third Scheme for Europe

28

Conclusion

30

Leveraging Celent’s Expertise

31

 

Support for Financial Institutions

31

 

Support for Vendors

31

Related Celent Research

32

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