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Promoting Competition by the New EU Payment Services Directive:
Overview of the aims of the Directive and its scope – State of play of
transposition Javier PALMERO ZURDO
Retail issues, consumer policy and payment systems (H3)DG “Internal Market and Services”
European [email protected] - 0032/2.296.36.70
“AK e-payment”Brussels, 15 May 2008
The views expressed are those of the author and do not necessarily reflect those of the Commission.
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Overview of the aims of the PSD and its scope
I. Evolution A step forward an EU Single Payments
Market
II. Why ? Economic benefits
III. How & Who? PSD / COM / ECB / EPC
IV. PSD The 3 pillars
V. PSD … and SEPA scopes
VI. Conclusions
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I. Evolution: a step forward an EU Single Payments Market (SPM)
• 1992: Internal Market.
• 1999 : Euro
• 2001: Regulation (EC) 2560/2001 on cross-border transfers / principle of equal charges
• 2002 : Euro notes and coins but still national payment markets
• 2003: Communication on a New Legal Framework (NLF)
• 2005: Commission proposal for a PSD
• 2007: PSD adoption
• 2008: SEPA launch – first SEPA credit transfer
• 1/1/2009: Deadline for PSD transposition
• End 2010: Critical mass migration to SEPA product
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II. Why?
POLITICALLY NEEDED FOR MORE ECONOMIC
INTEGRATION IN EURO-AREA
Legal barriers: Fragmented legal framework – 27 sets of different national rules
Commercial and technical barriers: a market driven process – European Payments Council (EPC) – agreements between banks of 31 countries
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46 legal entities in 10 countries Banking relationships with multiple
banks in 16 countries different accounting systems some SAP 4.6/B some SAP 4.6/C Usage of 20 different electronic banking
packages
Domestic: 10 different formats supported Cross border: 7 different formats used For 13 entities paper based delivery to
the bank For 8 entities manual input in bank
software Direct debits: 6 formats supported Electronic receipts: 5 different formats
for 3 countries applied
Systems Formats
SEPA offers potential for extensive efficiency gains
SEPA potential for corporates
Example: big corporate operating in 25 European countries
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SEPA benefits for corporates
European entities as internal clients to shared
service center
Shared service center acting as company‘s
interface to banks
Using one format Sending one format Receiving one format
Company's transaction banks in Europe
Shared Service Center
Bank A
Bank B
Bank C
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Three SEPA pillars
III. How and who?
Regulator:
Payment Services Directive provides the legal foundation for SEPA (including domestic payments)
Banks’ supervisor:sets requirements,
timelines & monitors progress
Represents banking
community: coordinates the
realisation of SEPA
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IV. The three PSD pillars
Enhanced competition
by opening up markets to new players Access to market
Payment institutions Prudential rulesfor authorisation
(FATF VI)
Increased transparency
throughharmonised information
requirements
Improve consumerprotection and
Choice
Standardised rights and
obligations for providers and
usersClarity,
harmonisation and
legal certainty
MORE COMPETITION !!!
+ +
=
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V. PSD and SEPA scopes
C.o.B. rules PSD SEPA
Geographical EU + EEA (30) EU+EEA+
Switzerland
Currencies Euro + currency of Member State
Euro
Stakeholders Any PSP under Art. 1 Banks
Space PSP - PSU Interbank
Services Payment services (annex) CT, DD,cards
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First PSDTG (6/2/2008)
•Territorial scope: non-EU PSP’s and their branches within the EU
Member States’ commitment to adopt necessary measures to
implement the PSD well before 1st November 2009!!!
Title I
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Second PSDTG (16/4/2008)
•Payment account run by a payment institution versus deposit
Member States’ commitment to adopt necessary measures to
implement the PSD well before 1st November 2009!!!
Title II
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VI. Conclusions
PSD: highly important piece of EU legislation: provides legal foundation for SEPA
Increases competition and protects users Need to ensure consistent implementation by Member States : May-
November, 4 more PSDTG, Titles III-VI Publicly available website for Q&Ahttp://ec.europa.eu/internal_market/payments/framework/transposition_en.htm
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Further information
European CommissionInternal Market and Services DGFinancial Institutions Retail Issues, Consumer Policy and Payment Systems
Javier PALMERO ZURDOTel: (32 2) 296.36.70E-mail:[email protected]
Daniela UMSTÄTTERTel: (32 2) 298.03.90E-mail:[email protected]