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Charlie McCREEVY

European Commissioner for Internal Market and Services

SEPA Goes live

SEPA Launch Event
Brussels, 28 January 2008

Ladies and Gentleman,

It is a very great pleasure for me to address you today at our "SEPA GOES LIVE" event. In particular, I am pleased that so many of you have accepted the invitation of Gertrude, Gerard and myself to join us this evening to celebrate the official launch of SEPA.

Today is a historic day for European payments and a watershed in the development and progression of the SEPA project. This morning the first credit transfer using the new SEPA standards has been executed. The SEPA project has moved from preparation to practice, from theory to reality.

After several years of hard preparation by the European banking industry and the EPC in particular, we now have a common standard for exchanging payment messages in euros throughout the EU and in the neighbouring countries of Iceland, Liechtenstein, Norway and Switzerland.

We should congratulate the EPC on this tremendous achievement.

Over the next three years, making electronic payments in euros throughout the whole of the EU is going to become as easy, efficient and convenient as making national payments today.

But SEPA is much more than this.

It will create a more efficient and competitive market for euro payments, a decisive factor to harness the full potential of the Single Market.

And the benefits are substantial. An extensive, in-depth study carried out by leading consultants for the Commission, which we publish today, shows that the potential benefits from SEPA in payments markets alone, could exceed 123 billion euros in the next 6 years.

Moreover, if we can use SEPA as a platform for e-invoicing, then a further 238 billion euros of savings could be achieved.

SEPA will strengthen competition, improve efficiency and offer greater economies of scale. Consumers will benefit from lower prices. There will also be pressure on the revenue of banks. I know that this is a challenge for the banking industry. But I am confident that banks will take up this challenge, improve the efficiency of payments, make use of the scale economies and use the opportunity of a bigger European payments market.

The recent decision taken by the Commission on the Mastercard case provides a very good basis for promoting more competition in the provision of payment services. It is important to underline, as my colleague Neelie Kroes has done, that the Mastercard decision does not forbid multilateral interchange fees (or MIFS) as they are often referred to. It is a question of level and having choice. Obviously, anyone who invests in a payment network has to get a return on their investment. So it is inevitable that there will be a charge associated with using a payment network. That seems to be basic economic sense. Is there such a thing as a cost-free payment network.? If there is then I can only suppose there must be some cross-subsidisation to cover the costs involved. After all, the costs have to be met from somewhere.

In any event, the Mastercard decision provides green light for anyone wanting to put a business case together to enter the SEPA payment world.

We have commissioned a study to look at the cost/benefit of SEPA. This shows clearly that maximum benefits can be reaped if all players move quickly. In particular,

  • With rapid SEPA migration, the estimated operational cost savings to banks are almost five times greater than the required investments. So, we need to strive for rapid and full migration to minimise the costs of dual payment systems during migration.
  • Then, in these volatile and changing times, payments business will continue to be a regular and increasing source of banking income as our study forecasts.
  • Finally, using SEPA as a platform for e-invoicing will offer further business opportunities.

And the story does not stop here. SEPA could also be used as a platform for e-lending and trade financing. In the public sector, SEPA could be used to drive e-Government and the development of transactional services in the areas of e-procurement, taxation and customs.

It is clearly in the public interest to support SEPA. The ECOFIN Conclusions adopted last Tuesday witness to strong support at the highest political level.

Now is the time to put our money where our mouth is.

We need to make this support operational. As heavy users of payment instruments, public authorities can help create critical mass by being early adopters of SEPA products. But, early adoption must always respect the non-deterioration principle established by Finance Ministers.

Ladies and gentlemen,

SEPA is a fantastic opportunity for the European economy, for growth, for our citizens. To make the best use of this opportunity we need everyone's skills, commitment and innovation.

Today we celebrate a historic milestone. So let us work together to make SEPA the tremendous success it deserves to be and to provide Europe with the world class payments system it needs to be a world class economy in the 21st century.

Thank you.

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