The SEPA Ripple Effect: Impacting a Non-European Country Near You Soon

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

Abstract

The impact of SEPA is increasingly understood inside Europe, but its wide-ranging impact has little visibility outside Europe.

In this report, The SEPA Ripple Effect: Impacting a Non-European Country Near You Soon, Celent highlights the range and depth of the Single Euro Payments Area’s potential effects, both positive and negative, on non-European countries. This is a companion to the Celent report SEPA Redux: Understanding How We Got Here.

While some elements of SEPA are well known, such as the move to a global payment message format in ISO 20022 and the adoption of new payment formats, the wider picture is less clear because banks operate in silos based around payment networks. However, what is clear is that the impact is much broader than many realize and is already shaping payments outside Europe.

“Payments are an increasingly global business, and every country is monitoring developments in other countries to understand the impact they will have and to learn what may improve their own country’s arrangements,” says Gareth Lodge, Senior Analyst at Celent and author of the report.

“Alongside death and taxes, regulation is now a certainty. Understanding what is behind the wave of regulation will help banks anticipate the changes,” he adds. “Banks that manage this and work with regulators rather than try to fight the tide will undoubtedly be more successful in managing changes.”

This report examines the concrete changes of SEPA and also notes a number of areas which, while uncertain, have a strong chance of coming true and could have a significant impact.

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 operating unit 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

The SEPA Story So Far

5

The Interchange Conundrum

7

 

Predictions and Recommendations

10

Standards

11

 

Predictions and Recommendations

11

Formalization of Payment Schemes

13

 

Predictions and Recommendations

14

Regulation

15

 

Predictions and Recommendations

15

Additional Points to Note

17

 

Outsourcing of Payments

17

 

EMV

18

 

Speed of Clearing

18

Conclusion

20

Leveraging Celent’s Expertise

21

 

Support for Financial Institutions

21

 

Support for Vendors

21

Related Celent Research

20

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