The Single Euro Payments Area: Can innovation be mandated?

Abstract

The Single Euro Payments Area is an ambitious policy maker-inspired project to build a European Union-wide internal market for payments which will not only be efficient but can also be used as a springboard for payment in­novation in the future. Self-regulation by the banking industry has delivered the foundations for pan-European payment instruments, yet their acceptance by the demand side is dependent on action by the European legislator. The latter may use this opportunity to legislate more than is necessary for achieving the migration from legacy, national payment instruments to the pan-European ones. In doing so, the legislator could lastingly affect market balances and actually jeopardise the competitiveness of the European payments industry on the international scene.