Cross-border euro payments scheme failing: EU

(BRUSSELS) - Countries should order banks to kickstart a flagging scheme to allow people to make quick and cheap electronic payments across European borders, the EU warned on Thursday.

The political push came in a damning assessment which saw Brussels list six separate areas where the Single Euro Payments Area (SEPA) scheme is in danger of unravelling.

"Waning enthusiasm by banks may be exacerbated by uncertainty surrounding key aspects of the project," a report by the European Commission said.

"While SEPA is primarily market-driven, some uncertainty can only be resolved with the aid of public authorities. Action is needed now by all stakeholders."

It cited problems with investment in data systems, public relations, compliance law, a lack of innovation, gaps in standardisation and the scheme's management structure.

A phased introduction began at the start of January 2008 and is due to be wrapped up by the end of 2010.

Meant to allow people to transfer money in a harmonised way throughout the 27 EU member states, plus Iceland, Liechtenstein, Norway and Switzerland, the brakes on its progress have been exacerbated by recession.

"To make SEPA a success, a strong commitment by all actors concerned is needed to ensure that the project is delivered on time and in a fully accountable way," Internal Market Commissioner Charlie McCreevy said in a statement.

Retail, wholesale and international trade lobbyists EuroCommerce said Brussels must act to ensure SEPA "does not lead to a deterioration of the payment market, in terms of prices, competition and quality of service.

"This would mean a failure of the whole project," said Xavier Durieu, whose organisation has initiated several cases against anti-competitive practices in the debit and credit card industry.

Single Euro Payments Area - new EC plans - briefing