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Promoting Competition by the New EU Payment Services Directive: Overview of the aims of the Directive and its scope – St

Promoting Competition by the New EU Payment Services Directive: Overview of the aims of the Directive and its scope – State of play of transposition.

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Promoting Competition by the New EU Payment Services Directive: Overview of the aims of the Directive and its scope – St

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  1. 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 ZURDORetail issues, consumer policy and payment systems (H3)DG “Internal Market and Services” European CommissionJavier.Palmero-Zurdo@ec.europa.eu -  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.

  2. Overview of the aims of the PSD and its scope • Evolution A step forward an EU Single Payments Market • Why ? Economic benefits • How & Who? PSD / COM / ECB / EPC • PSD The 3 pillars • PSD … and SEPA scopes • Conclusions

  3. 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

  4. 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

  5. SEPA potential for corporates Example: big corporate operating in 25 European countries Systems Formats • 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 SEPA offers potential for extensive efficiency gains

  6. SEPA benefits for corporates European entities as internal clients to shared service center Shared service center acting as company‘s interface to banks Company's transaction banks in Europe Bank A Shared Service Center Bank B Bank C Using one format Sending one format Receiving one format

  7. 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 Three SEPA pillars

  8. IV. The three PSD pillars Enhanced competition by opening up markets to new players Access to market Payment institutions Prudential rules for authorisation (FATF VI) Increased transparency through harmonised information requirements Improve consumer protection and Choice Standardised rights and obligations for providers and users Clarity, harmonisation and legal certainty + + =

  9. V. PSD and SEPA scopes

  10. Title I First PSDTG (6/2/2008) Member States’ commitment to adopt necessary measures to implement the PSD well before 1st November 2009!!! • Territorial scope: non-EU PSP’s and their branches within the EU

  11. Title II Second PSDTG (16/4/2008) Member States’ commitment to adopt necessary measures to implement the PSD well before 1st November 2009!!! • Payment account run by a payment institution versus deposit

  12. 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&A http://ec.europa.eu/internal_market/payments/framework/transposition_en.htm

  13. European Commission Internal Market and Services DG Financial Institutions Retail Issues, Consumer Policy and Payment Systems Javier PALMERO ZURDO Tel: (32 2) 296.36.70 E-mail: Javier.Palmero-Zurdo@ec.europa.eu Daniela UMSTÄTTER Tel: (32 2) 298.03.90 E-mail: Daniela.Umstaetter@ec.europa.eu Further information

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