28. European Payments: A Path Towards the Single Market for Payments

This chapter explores the progress of European Payments Integration since the introduction of the euro. The significant project of creating a European Single Market for Payments, that would facilitate efficient and cost-effective cross-border payment transactions to underpin intra-European trade, began in earnest in 2002 with the creation of the European Payments Council (EPC) and the development of the Single Euro Payments Area (SEPA) initiative. With a fragmented payments market in Europe, characterized by different payment standards, formats, services and market practices, the SEPA project began a long journey of harmonization covering technical, regulatory and legal as well as product/service levels. The EPC developed dedicated technical and business rules for the creation of SEPA credit transfer and direct debit services as well as harmonization standards for SEPA card services. In parallel, the European payments industry required support from EU legislators to ensure a harmonised legal environment in which SEPA services could be recognized in the same way both domestic and across borders. Various legislative measures were thus developed and adopted at EU level, ranging from the Payment Services Directive of 2007 to the SEPA Regulation of 2012 and most recently the updated Payment services Directive 2 published in December 2015.