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Brussels, 28 January 2008

Single Euro Payments Area (SEPA): Commission publishes major cost-benefit study (See IP/08/98)

The European Commission has published today a major study into the costs, benefits and opportunities created by SEPA (the Single Euro Payments Area) which was formally launched today (see IP/08/98 - Joint Statement). The study shows that in the most favourable scenario the net benefits to payments markets over the next six years could amount to as much as 123 billion euros with users gaining most. However, this calls for rapid and full migration from existing national payment products to the new SEPA payment instruments. The study also estimates that if SEPA can be used as a platform for e-invoicing there are further potential gains of 238 billion euros.

Internal Market and Services Commissioner Charlie McCreevy said: "Today is a historic day for payments in Europe with the official launch by banks of the new SEPA credit transfer. This study shows the tremendous savings we can achieve through SEPA and its potential for the wider economy. SEPA will improve the efficiency and competitiveness of the single market and realise our ambition to make euro payments across the EU as easy, efficient and secure as domestic payments. The study also shows the importance of all stakeholders supporting SEPA and becoming early adopters of the new SEPA products in a market-driven process".

Study background

The study assesses the costs and benefits of SEPA for the supply (banks) and demand (customers) sides over a 6 year time framework (2007–2012) for four corner scenarios to asses the impact of SEPA on the key stakeholders[1].

"All Tied Up" scenario : neither demand side nor supply side is convinced that the investments needed to make SEPA payments will pay off.

"Demand Pull" scenario: stakeholders expects significant benefits from the use of SEPA payments. These stakeholders will force their banks to start offering SEPA payment products, opening up the market.

"Supply Push" scenario: the market is pushed by banks and the new payment institutions towards adopting SEPA payment products.

"SEPA Big Time" scenario: both supply and demand side expect to derive benefits from the use of SEPA payment products. Accordingly, investments in compliance and migration are done early and strategies are comprehensive.

To evaluate the quantitative effects on stakeholders over time, the ‘net SEPA effect’ is defined as the sum of the necessary investments, change in operational costs, and change in bank fees.

Study Results

Overall the most important findings are:

  • The SEPA Big Time scenario holds a market potential of up to 123 billion euros in benefits (cumulative over 6 years, namely 2007 to 2012) with a significant upside for all demand side stakeholders while allowing banks to retain current margins.
  • Consumers gain in all scenarios, while other stakeholders (especially SMEs and corporates) benefit - by tens of billions of euros - in the Demand Pull and SEPA Big Time scenarios.
  • SEPA clearly tempers the margins of the supply side; however, even in the most aggressive scenario the margins still grow in absolute terms compared to 2006. As decreases in operational costs made possible by SEPA outweigh revenue reductions, annual total banks profits for payments are forecast to increase from 10 billion euros in 2006 to 21 billion euros in 2012.

A summary of the overall net benefits to the market for the four scenarios is given below

(in billion euros over the period 2007-2012)

All tied up
Demand Pull
Supply Push
SEPA Big Time
Net benefit to market


Using SEPA as a platform, banks are well positioned to offer e-invoicing services. This could produce a potential net benefit to the market of 238 billion euros over the same period.

A copy of the full study can be found at:

[1] These are: on the demand side- consumers, SMEs, merchants, corporates, public entities; and on the supply side- banks, processors, technology vendors considered as a whole.

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