2008 World Payments Report: a post-SEPA Europe will also be well-equipped to do so in the global payments arena

Cards are the fastest growing means of non-cash payments, accounting […]

October 15, 2008

Cards are the fastest growing means of non-cash payments, accounting for 54% of payment volumes worldwide, and demonstrating the importance of non-cash payment mechanisms to trade and consumer spending in our globalised economy, new research into the global payments market has found. Between 2001 and 2006, card transactions increased 16% worldwide and 11% in Europe annually, according to The World Payments Report 2008 from Capgemini, The Royal Bank of Scotland (RBS) and The European Financial Management and Marketing Association (EFMA). The finding lends a further urgency to work underway in Europe to ensure standardization of euro cards payments across Europe’s diverse card networks and to make SEPA for cards achievable, according to the report’s authors.

According to Bertrand Lavayssière, Managing Director Global Financial Services, Capgemini: “Banks have until 2010 to move from their existing domestic schemes to SEPA card schemes, but clearly some core issues (such as common technical standards, interchange fees regulation and scheme governance) must be resolved in order for SEPA cards to become a reality under one option or another. With cards driving worldwide growth in non-cash payments volumes, the focus on this work is intensified.”

China could take Eurozone’s position as second largest payments market – but mature economies will dominate up to 2013

Overall non-cash payments reached 233 billion worldwide in 2006. Mature economies accounted for 80% of these payments, with Europe on its own accounting for a third, and these economies should maintain their dominance up to 2013, the research found. But China accounted for 7% of the global volume of non-cash payments in 2006, with a growth rate of 46% annually from 2001 to 2006, so China could potentially overtake the Eurozone as the second largest payments market by 2013.

Brian Stevenson, Chief Executive, Global Transaction Services, RBS said: “Where trade goes, payments follow and this research flags up clearly that China’s huge potential as an engine for growth is being realized.”

Initial SEPA milestones achieved; challenges remain on path to European payment integration

Over the four years of its publication, The World Payments Report has charted progress towards SEPA, the most ambitious regional payments integration plan to date. This year’s report recognizes a number of significant achievements, including the launch of SEPA Credit Transfers in January 2008, and charts progress on remaining challenges.

Brian Stevenson, Chief Executive, Global Transaction Services, RBS says: “Corporations are under no legal obligation to participate in SEPA and will only adopt the new payment instruments at a time and pace that suits their business needs. Yet SEPA offers worthwhile cash management benefits to corporations with pan-European business. Banks have an important role to play in helping their corporate clients to identify those benefits, which in turn will help to achieve the critical mass vital to the success of SEPA. And SEPA should also help banks themselves to operate more efficiently.”

In addition, Bertrand Lavayssière, Managing Director, Global Financial Services, Capgemini commented that: “SEPA presents banks with the opportunity to develop a number of new products and services that will benefit companies doing business in Europe. At the same time, the banks that prosper in a post-SEPA Europe will also be well-equipped to do so in the global payments arena.”
The report raises the question as to whether end-dates for decommissioning legacy instruments will be needed to stimulate and accelerate the migration process.

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