On June 8 the commission announced a new consultation a ‘a possible end date for SEPA migration’ ( ) in order to force the market to start using SEPA payment products (credit transfer and direct debit). Indeed, SEPA volumes aren’t coming by themselves. Administrations, consumers and businesses are still puzzled about what to do with SEPA products. Where is the real value? Why should some customer groups migrate when functionalities aren’t better? Were these product really designed with the customer in mind?

So far SEPA was all about compliance. Compliance to a threat of regulation, therefore EPC chairman Gerard Hartsink stresses the point of ‘co-regulation’ as opposed to ‘self regulation’. All SEPA banking project have been about changing the wiring, pipes and nuts and bolts. PSD has given more focus to the customer and channel aspect, but the focus has been to reaching deadlines, instead of bringing compelling propositions to market. All at an industry cost of several billions.

Compliance projects aren’t usually undertaken to improve customer’s lives. Customer’s do not play a key role. Maybe not this time: with a SEPA end date the banking industry has a new opportunity to include the customers in the equation. Because now banks and payment institutions will have to think about compelling propositions, in order to engage their customer. Otherwise the customer will move on to the next and better offering.

Will innovation finally benefit from regulation?

Tags: innovation, PSD, SEPA

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