The Paypers: In its latest newsletter, EPC Chair Gerard Hartsink clearly states that setting in place a binding EC-backed instrument (which would serve the purpose of setting end dates for compliance of euro credit transfer and euro direct debit schemes with so-called "essential requirements") would do more harm than good.

In Mr. Hartsink’s own words, “this piece of financial legislation now in the pipeline reflects political pretence rather than a regulatory intervention aimed at making SEPA a reality. If endorsed by EU lawmakers, the legislative act currently envisaged would effectively derail the entire SEPA project and deprive bank customers of the benefits associated with the SEPA harmonization initiative”. Do you share this view? What is your perception on this issue of “technical standards” (EPC) versus “essential requirements & functional services” (EC)?

Abdelmajid Moujane: By refusing to support the EPC as the sole provider of technical standards around SEPA, the EU aims to open the floor to non-banks and foster competition within the payments space. Whilst this move might change the way in which SEPA is rolled out, it will not, as the EPC suggests, derail the SEPA project in its entirety. As stated in the EPC newsletter, the banks which represent the majority of the European payments market have adhered to SEPA Direct Debits and SEPA Credit Transfer schemes. This will not change.

However, instead of relying on regulatory drivers for full migration, the EC’s proposal means that it will be up to the banks to maximise their investments in this area. The banks that are prioritising payment systems with SEPA migration will still be keen to progress in order to maximise ROI, move away from legacy payment systems and start offering e- SEPA payments to their customers.

The Paypers: What impact do you envisage the new EU proposal will have on the European financial & banking landscape, particularly in the area of technical standards and payment schemes?

Abdelmajid Moujane: The EU’s “essential requirements” proposal will no doubt increase competition in the space. It may not have much direct impact on the SEPA Direct Debit and Credit Transfers schemes, since most banks have already invested in these infrastructures. However, the proposal will mean that m-SEPA and e-SEPA will not be pushed forward using regulation; instead uptake will be left open to market forces. Since most banks in the UK are considering the future roll out of mobile payments, this is unlikely to inhibit developments.

The Paypers: Where does this move towards “essential requirements & functional services” leave banks that are already in full process of migration to SEPA?

Abdelmajid Moujane: For banks already in the process of migrating to SEPA Direct Debits and Credit Transfers, the EU’s proposal will mean that next steps will be up to them. The EPC’s technical standard is supported by the EU so banks will be able to build on their progress to date. Consequently, most banks will want to complete the infrastructural change in order to remove legacy technology, improve customer service and drive efficiencies and ROI.

The Paypers: Also, what impact will it have on e-SEPA and m-SEPA? How will European e-commerce and the European mobile payments market be affected by the new EU proposal?

Abdelmajid Moujane: Unlike SEPA Direct Debits and SEPA Credit Transfers, mobile and e-payments are less dependent on regulatory drivers and are, to a large extent, driven by market demand. For example, m-SEPA will be pushed forward through the uptake of contactless and mobile payments, which is gaining momentum in the payments space as banks look to modernise their payments systems and meet consumer demand for mobile payments technology.”

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