Corporates have joined forces with a group of international banks to demand more rapid progress towards an open payments market not only within the Euro-zone, but right across the EU. Or so says TWIST, the open standards body that is pushing for a common messaging protocol.
TWIST says corporate users of payments services support the drive towards a Single Euro Payment Area (SEPA), and are demanding an integrated European payments system that will enable consumers as well as businesses to make any non-cash payments in Europe simply and cheaply.
“With many of the legal issues near to resolution, the focus of SEPA is now turning to some of the implementation issues and the practical fulfilments of corporate requirements,” Tom Buschman, chairman of TWIST, told a conference on Monday. “The real user-driven momentum behind a Single Payment Area that will work not only within the Euro-zone, but also across the rest of Europe, is now being matched by support from the regulators and the major internationally-focused banks. Corporations will invest in new payment solutions if it enhances efficiencies and improves their controls. There are services available in different parts of Europe that can provide the right solution if offered in an open market. So the solution for SEPA implementation is to provide customers with free and easy access to the payment services of their choice.”
TWIST maintains that, for corporates to switch service provider, they need standardised electronic access to any provider and the ability to make bank accounts portable within the European market. The open standards required are available and portability of accounts is already obtainable across the banking market in the USA, the standards body claims.
“Few of the much-quoted barriers to the implementation of SEPA stand up to much scrutiny,” explains Jan Molema, manager for EU affairs at IKEA. “With the support of the European Commission, the European Central Bank and many large corporates, the momentum behind a user-driven design for SEPA is growing fast. For a company like IKEA, present in 18 EU member states, it is incomprehensible to see that we still have different systems in every member state for accepting, for instance, payment cards. Moreover these payment systems are often driven by local monopolies of banks leading to excessively high cost, as recently recognised in a sector inquiry by the European Commission. SEPA, if based on real competition, allowing for new players on the market and a cost-based rather than a pure profit-based approach can finally lead to an efficient payments industry bringing benefit to all stakeholders, including consumers.”
“Most of the more innovative and competitive banks that have pan-European ambitions are now also squarely behind the initiative,” adds Chris Skinner, industry commentator from Balatro Ltd, an advisory network for banking strategists. “It is only the less competitive local players, ones that have the most to lose from open competition, which are now dragging their heels.”
TWIST launched a white paper on user requirements and business solutions for SEPA at the conference in Brussels on Monday. It was attended by representatives from the European Commission, and Members of the European Parliament.
TWIST Process Innovations Limited aims to create global standards that will facilitate the automation of any company’s payments process. It aims to develop practical standards that allow market participants to communicate electronically with each other, whether using direct links, external service providers or internal systems. It is made up of representatives of corporate treasuries, banks, fund managers, system suppliers, electronic trading platforms, market infrastructure providers (including confirmation matching services, clearing & settlement services and communication networks), and consultancy firms.
Current TWIST standards cover wholesale financial market transaction processing, order management, e-invoicing and payment processing, bank account opening and closing, billing of bank services, credit management, supply chain financing plus identity management and security. TWIST also participates in the management of the ISO 20022 standards for financial markets, aiming to make this the umbrella for its standards.