Informations and abstract
Keywords: SEPA; Cashless Payment; Retail Banking; Payment Card; Direct Debit; Credit Transfer. JEL Classification: G10.
The Single Euro Payments Area (SEPA) is a domain in which 28 States of European Union (EU) plus Monaco, Switzerland, Iceland, Liechtenstein, and Norway are standardizing all euro payments, served to households and corporates. The project has strong impacts on the European financial integration and on the establishment of the future banking union, with the European Central Bank (ECB) at the core in all three models. In the article, we survey on migration specifics that lie heavily on banks and corporates and discuss the potential drawbacks and benefits. From one hand, the risk of failure or partial success of SEPA migration is condition for a further fragmentation of retail banking services in three markets: SEPAelectronic payments, payment instruments NO-SEPA compliant and cash. From other and more considerable perspectives, there are opportunities in banks initiatives to speed up fast and reliable payments especially in countries which strongly rely on cash, such as Italy. If banks succeed in exploiting all the benefits encompassed in the SEPA (having more on: technology, traceability, anti-money laundering and cost savings) they may change the payment industry in Europe and also the predominant and fragmentated model of retail banking. This imperative is pressing now for banks because of the high levels on two ratios they are facing: cost/income and no-performing loan/total assets. The benefits of innovation are effective as electronic payments are assets almost risk free, built on cost savings and absorb little capital in terms of Basel requirements.