The impact of SEPA on domestic markets and the future for emerging pan-European infrastructures

Abstract

With the start of the single euro payments area (SEPA) with the SEPA Credit Transfer (SCT) recently, the currently ongoing process of transposition of the Payments Services Directive (PSD) into national law and the SEPA Direct Debit (SDD) shortly being introduced in all 31 participating countries, many questions regarding the future of the European payments landscape seem still to be unanswered. Without a doubt, SEPA will have a tremendous impact on all national payment markets; yet, nobody can for sure predict today which effects the markets will see precisely. Both large pillars of the electronic payment business — giro payments (consisting of clearing and settlement as well as back-office processing) and card payments (consisting of acquiring and issuing activities) — will experience different developments in the years to come. Moreover, with the current national fragmentation and the differing stages of maturity that each national market has reached, every national market will undertake its own journey with its own timeline towards the migration to a truly single European payments market. A closer look on the current status and possible scenarios for ten European countries — including the five largest — that represent each region, market size and maturity stage might help to bring more clarity on the impact of SEPA.