Post image for SEPA for Cards – The New Ballgame

We are delighted to feature another post by Manfred Schuck, a terrific payments consultant from Frankfurt, who will co-lead with Elizabeth McQuerry our upcoming Payments in Europe Insight workshop to be held in Mountain View, CA on October 9.

Now, it’s about cards.  Here’s how the European Payments Council (EPC), the self-regulation body of the European Banking Industry, views its SEPA for cards initiative:

“The Single Euro Payments Area (SEPA) for cards sets the conditions to offer European cardholders general purpose cards to make euro payments and withdraw euro cash throughout SEPA, with the same ease and convenience as in their home country. It also enables European merchants to choose which SEPA compliant card acceptance brand and product they wish to accept and with which acquirer(s) they wish to contract, without this choice being artificially constrained by legal, technical, or procedural issues”.


Why does this matter?  In the view of the EPC:

“European consumers benefit from wider acceptance of their cards within SEPA and more choice of card products than before. European merchants benefit from a more competitive acquiring market, and are able to choose which card schemes to accept and from which acquirer”.

In other words, interoperable card products – for both credit and debit – are on the top of the SEPA agenda.

SEPA Cards Framework

The EPC’s SEPA Cards Framework (SCF) outlines the high level principles and rules that it believes are necessary to deliver a consistent user experience to both cardholders and merchants for either making or accepting euro payments as well as cash withdrawals. Naturally, the SCF recognises only the EMV standard for SEPA-wide acceptance of card payments.

SEPA cards standardisation program

As with past SEPA initiatives, standards and standardisation drive the process. The SEPA for cards objectives will be achieved through the use of harmonised, interoperable and free standards, openly available to all parties within the card payment value chain. The work of the EPC and the Cards Stakeholders Group (CSG) supports the effort. Created in 2009, the CSG is a multi-stakeholder body representing retailers, vendors, processors, card schemes and the EPC.

The CSG encourages process efficiency throughout the card supply chain and, of particular urgency today, adherence to the highest level of card payment security. To ensure an interoperable and scalable card and terminal infrastructure across SEPA, the CSG develops and maintains the SEPA Cards Standardisation Volume (the SCS Volume), a document defining the standard’s set of requirements.

Card fraud prevention

According to the EPC, card fraud prevention is one of its top priorities. The EPC had committed to migrate all SEPA cards and terminals to chip and personal identification number (PIN), based on the global EMV standards, by the end of 2010. That migration is nearly complete with all SEPA-area cards requiring PIN-based verification when used within the SEPA countries. Of course, cards from the US, using signature verification, will work fine).  The focus going forward is on identifying and promoting measures to fight card fraud in a mature chip and PIN environment.

Practical developments

There were multiple national card schemes in existence across the SEPA, but none of them were really SCF-compliant. Only the schemes of the two mayor international brands (MasterCard and VISA) offered the same level of service throughout the SEPA. While European institutions are keen on having an “own” European SEPA-compliant cards scheme, all efforts to create one have failed so far.  Instead, employing the tactic of harmonizing national card schemes and making them interoperable is the avenue most likely to succeed.  Such pan-European cooperation is already underway: the Euro Alliance of Payments Schemes (EAPS), founded in 2007, is the approach being taken to reach the aims of the SCF without creating new card schemes.


The creation of SEPA and the SCF has had a significant influence on the European cards landscape, especially in the debit card area. But not all aims have been reached and you can rest assured that more changes will come!



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