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Gaining a competitive edge in payments under Single Euro Payments Area (SEPA)

Overcoming challenges for payments services providers (PSPs) and payments services users (PSUs).


Contrary to common belief, migration to the Single Euro Payments Area (SEPA) is far from complete—both for payments services providers (PSPs) and payments services users (PSUs). A lot of work still needs to be carried out because:

  • Many participants approached their initial SEPA migration as a compliance project primarily to meet a point-in-time deadline, rather than an opportunity to reengineer their payments operations.

  • The SEPA scheme is still evolving. The next versions of the SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) rulebooks are currently under development and scheduled to come into effect beginning November 2015.

Against this background, the next phase of SEPA migration is imminent—focusing on payments transformation. In this phase, corporates will need to take steps to consolidate their banking relationships and harmonize their processes. Further, on the supplier side, this phase will see wider acceptance of SEPA Additional Optional Services (AOS)—as PSPs seek to build differentiation and win market share in a highly competitive payments marketplace.

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The migration to SEPA has proved to be a long and costly process for many banks and large corporates. The July 2014 figures from the European Central Bank (ECB) indicate that 98 percent of credit transfer (CT) transactions in the SEPA zone were processed through the SEPA scheme, while the corresponding figure for direct debit (DD) transactions was 97 percent. These high figures have given rise to a common misconception—that SEPA migration is complete. But, many small and medium enterprises (SMEs) are yet to migrate.

Meanwhile, for the corporates and financial institutions that have migrated successfully, questions remain whether their projects leverage SEPA as a long-term opportunity, or if they treat it as a regulatory obligation. But, considering the benefits of migration to SEPA—which offers an opportunity for the harmonization of payments infrastructure across the Eurozone’s member states—companies that fail to harness its full potential stand to lose out.

Further, advances such as the SEPA principle of equal charges and the abolition of transaction multilateral interchange fees (MIFs) for cross-border direct debits mean that PSPs are now in a position to market their services on a European level. As a result, corporates have an unprecedented level of choice when it comes to selecting their banking partners.

Key Findings

Accenture envisions two primary trends for the financial services industry in Europe:

Trend 1: Industry and service consolidation

​Once the dust settles on the SEPA migration and corporates feel confident that the outstanding issues have been resolved, the industry is likely to see increased levels of banking consolidation and "payment-on-behalf-of" (POBO) structures. Also, increased competition between PSPs will drive price convergence, and a need for greater efficiency, innovation and market differentiation. 

Trend 2: Enhancement through optional services

Given the scale of change required for SEPA compliance, many financial institutions initially focused on core requirements and non-optional elements. However, now that significant progress has been made, many banks are looking toward implementation of additional optional services (AOS) that will benefit them as well as end users, such as:

  • Core time cycle (COR1): Only three countries are operating the COR1 optional element of the SEPA Direct Debit scheme, which offers corporates greater agility and tighter control over their cash flows.

  • Direct Debit B2B scheme: This scheme is supported by just 88 percent of financial institutions that are registered as SEPA-ready participants in the Direct Debit Core scheme.

  • E-mandate: The use of e-mandates to automate the entire end-to-end processing and management of SEPA direct debit mandates.


SEPA has fundamentally changed the payments landscape across 34 countries. However, many SEPA programs have been short-term in nature, focusing on "getting the job done" in terms of compliance. This approach meant that many corporates missed out on the chance to exploit SEPA as an opportunity to reengineer their business and drive a fundamental transformation of their finance operation.

As SEPA continues to evolve, corporates are looking at opportunities to fully realize SEPA’s potential. They are likely to pursue finance transformation through initiatives such as consolidating their payments processing with selected suppliers and creating shared-service payments factories (whether in-house or outsourced) to maximize efficiency, visibility and standardization.

PSPs and banks that act now—by moving away from a series of discrete, tactical compliance projects to a continuous, forward-thinking approach to SEPA—will be best placed to win.