O I I O I O I I O I O I O I O I EUROPEAN PAYMENTS COUNCIL Towards our Single Payment Area O O O O O O O O O O I I O I O I I O I O I O I O I Payment systems: efficiency and fairness Roadmap for the Single Euro Payment Area European Parliamentary Financial Services Forum Gerard Hartsink Chairman European Payments Council Brussels, January 27, 2004
28
Embed
EUROPEAN PAYMENTS COUNCIL Towards our Single Payment Area O O O O O O I I O I O I I O I O I O I 1 FEDERATION BANCAIRE DE L'UNION EUROPEENNE BANKING FEDERATION.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
FEDERATION BANCAIRE DE L'UNION EUROPEENNEBANKING FEDERATION OF THE EUROPEAN UNION
BANKENVEREINIGUNG DER EUROPÄISCHEN UNION
EUROPEAN SAVINGS BANKS GROUPGROUPEMENT EUROPEEN DES CAISSES D’EPARGNE
UROPÄISCHE SPARKASSENVEREINIGUNG
EUROPEAN ASSOCIATION OF COOPERATIVE BANKSGROUPEMENT EUROPEEN DES BANQUES COOPERATIVES
EUROPÄISCHE VEREINIGUNG DER GENOSSENSCHAFTSBANKEN
EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Payment systems: efficiency and fairness
Roadmap for the Single Euro Payment Area
European Parliamentary Financial Services Forum
Gerard HartsinkChairman European Payments CouncilBrussels, January 27, 2004
2EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Agenda
Legal and economic landscape
EPC governance framework
Progress for retail payments
Progress for large value payments
Conclusions
3EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Legal Landscape
Regulation 2560 (Dec 2001) on cross-border payments in Euro:Decision of the European Parliament and the EU Council Euroland = Domestic ConceptEuro: reality for 305 million Europeans in 12 countriesCards: 1-7-2002; credit transfers 1-7-2003
CommissionConsultative Communication December 2, 2003 « New Legal Framework
for Payments in the Internal Market »
4EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Cross-Border and Domestic Payment Transactions
* Estimate based on 1999 figures, with a CAGR of 6%Source: EFMA; SWIFT; TARGET; ECB statistics; McKinsey analysis – EU 15, 2001
Others 1.7%
Cash withdrawals
Direct debits
Domestic transactions*
15.5%
28.1%
13.7%
19.5%
Cheques
21.4%
Credit transfers
Card payments
Card payments are by far the most frequently used means of payment for cross-border transactions
Average number non cash payments 131 174 189 164 74 219 222 223 20 114 62 130 225 158 172 162
Note: 2001 figures, not including cash transactions
Source: ECB Bluebook (Addendum, September 2003)
* non Euro countries
* * *
* * *
6EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Retail Payments Transactions in the EU 15 (2)
7EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Retail Payments Transactions in the EU 15 (3)
8EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
EPC Governance Framework
EPC vision
EPC Charter principles
EPC Council structure
Dialogue with other SEPA stakeholders
9EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
European Payments Council vision
March 2002: SEPA Workshop
White Paper: “Euroland: our Single Payment Area!”
« We, the European banks and Credit Sector Associations, Share the common vision that Euroland payments are domestic payments,
Join forces to implement this vision for the benefit of European customers, industry and banks, and accordingly,
Launch our Single Payment Area »
Major players of the European payments industry and a fair representation of smaller players (42 banks and 4 associations: EBF, EACB, ESBG, EBA)
10EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Some principles of the approved EPC Charter
The EPC = the « decision making body for the European payments industry »
Major players of the payments industry with a fair representation of the smaller players
Proper representation of banks of 10 acceding countriesThe European Credit, National Banking, and Payment
Associations should all be embedded to guarantee a proper preparation and a timely implementation of decisions
The EPC will give the strategic guidance to the standards process executed by ECBS, SWIFT, card companies, etc.
11EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
3430545Total Euro countries
1__EBA56013,3UK
5945364Total
3__ECSAs150,9Denmark
160,65Switzerland191,5Sweden
10,250,075Iceland140,4Ireland
141Norway151,1Finland
10,70,05Cyprus1110,2Greece
10,40,03Malta181,1Austria
120,1Slovenia10,40,1Luxembourg
1100,4Hungary4163,6Netherlands
150,2Slovakia2101,8Belgium
1101,0Czech Republic2101,6Portugal
2390,9Poland3403,0Spain
140,1Lithuania4583,6Italy
120,1Latvia76013,4France
110,1Estonia78215,6Germany
MembersMillion inhab.
Billion trans.
MembersMillion inhab.
Billion trans.
•Seat numbers could be adjusted through « wild » cards•Market shares are validated by ESCB as TTP
Council Structure: country dimension DRAFT
12EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Dialogue with other SEPA Stakeholders (1)
Authorities
European Commission: PSMG meetings Bilateral meetings
European Parliament: EMAC hearings
Central banks (ECB and ESCB)
COGEPS meetings (co-operation model) Roles: catalyst role
oversight role regulator role operator role (settlement services)
13EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Relations with ECB (ESCB)
“The Eurosystem very much welcomes the decisions taken and general commitments made by the EPC”*
“In many cases the EPC has articulated political intentions, but concrete deadlines and milestones are still missing. The EPC needs to transform its objectives into a fully-fledged project with a sound plan and fixed deliverables. A convincing arrangement for the enforcement of EPC decisions needs to be developed and communicated to all banks and the general public.”*
Today: SEPA indicators for design and for implementation available.
* ECB: June 2003
14EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Dialogue with other Stakeholders
Banks’ customers - Treasurers: EACT (together with ECB)
- Retailers: Eurocommerce
- SME’s: UEAPME
- Consumers: BEUC
- Government treasurers: in pipeline
Key messages: - What do you expect from SEPA?
- What is our EPC vision?
- What is your and our progress so far?
- What are your top 10 concerns?
15EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Progress for retail payments
Challenges Credit Transfers Direct Debits Infrastructure(s) Cards Cash
16EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Challenges for Retail Payments
For existing (domestic) payment instruments:
- optimising processes of (for) existing
Euro payment instruments
- removal legal (reporting) obstacles
For new pan-Euro(pean) payment instruments:
- commitment to change national payment habits of all stakeholders?
- commitment on end-to-end standards?
- uniform legal environment?
- modernisation (simplification) regulatory
framework for Euroland (Europe)?
17EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Credit Transfers
Approved recommendations: IBAN (International Bank Account Number) Credeuro resolution ICP (Interbank Convention on Payments) Cross border cheque recommendation (Dec 2003) FATF (Financial Action Task Force) recommendation 7
In Pipeline:
Recommendations on several standards Recommendations on mobile payments
Remark: Implementation by banks and customers ECB report on standards: Q1/Q2, 2004
18EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Direct Debits
Approved recommendations: Pan-European Direct Debit scheme report (Dec 2003)
In Pipeline Final choice of model(s) Dialogue with stakeholders (also tax authorities)
Remark: Landwell report 2003 New Legal Framework for Payments (Dec 2003) Governments: launching customers
19EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Payment Systems require high initial investment their use is subject to large economies of scale effects
Number of existing systems
great potential for efficiency gains
Infrastructure: ECB position (1)
Source: ECB
20EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
&
Domestic payment areas
Cross-border
payments
+
Efficientdomestic
infrastructure
Inefficientcross-border
infrastructure
Efficientpan-Europeaninfrastructure
High volume
Low cost
+
&
High service level
& Low prices
0-3
High volume
Low cost
+Low volume
High cost
+
&
Retail payments in euro
Infrastructure: ECB position (2)
Source: ECB
Low service level
& High prices
17-24
High service level
& Low prices
21EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Infrastructure: EPC position
Approved recommendations: PE-ACH (pan-European Automatic Clearing House) concept PE-ACH governance guiding principles Receiver capability of all banks
In Pipeline:Implementation of receiver capability by all banks
Remarks: PE-ACH = Step2 scheme of EBA Clearing Company EBA STEP2 : More than 1,100 direct and indirect
participants
: Operational since Q3 2003
22EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
NCB functions, etc. Recommendation on cross border cash transportation (Dec 2003)Recommendation on NCB core functions (Dec 2003)
In Pipeline:Inventory national cash schemes
Remarks:Cash is most expensive payment instrument
24EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Progress for large value payments
Target 1
Target 2
25EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
NCBNCBNCBNCB
NCBNCB
NCBNCB
NCBNCB
NCBNCB NCBNCB
NCBNCB
NCBNCB
NCBNCB
NCBNCB
NCBNCB
NCBNCBECBECB
NCBNCB
NCBNCB
Target (today)
TARGETTARGETInterlinkingInterlinking
NetworkNetwork
ILC
ILC
ILC
ILC
ILC
ILCILC
ILC
ILC
ILCILC
ILC
ILC
ILC
ILC
ILC
Source: ECB
26EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Target 2: ESCB approach
October 24, 2002:
Strategic Decision of Governance Council on
Multi platform system System for large value Euro payments Core service with options for NCB to provide additional
services Euro system wide price structure
27EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Target 2: EPC approach
Common position on Target user requirements Single integrated system Core functionalities Compliance with core principles BIS Service level improvement Timing project deliverables
Decisions ECB (ESCB) Q1 2004: Mono platform
28EUROPEAN PAYMENTS COUNCILTowards our Single Payment Area
O O OO O OO O O O
I I O
I O II O I O
I O I O I
Conclusions
The EPC was able to re-establish the trust of the ECB and EC
in the payments industry
The ECB and the EC and other stakeholders (Corporates, retailers) expect deliverables with concrete deadlines and milestones
Key words for the future are: standardisation and consolidation for retail payment systems and for Target 2
Governments should remove legal obstacles a.s.a.p. and should become the launching customers (e.g. tax) for the new payment instruments for Euroland