EC To Investigate Europe-Wide E-Payments Scheme


The SEPA Europe-wide e-payments system, proposed by banks, could exclude newbies like PayPal

The European Commission is to launch an investigation into a new payments system being developed by banks including Barclays and HSBC, following a complaint that the system is unfair to newer payment providers such as PayPal.

The investigation, announced by competition commissioner Joaquín Almunia on Monday, will look into a standard framework for e-payments called the Single Euro Payments Area (SEPA) currently in development by the European Payments Council (EPC), which includes banks such as Deutsche Bank, HSBC, BNP, Santander and Barclays.


SEPA is intended to allow users to buy online anywhere in Europe and to pay using their own Internet banking services and current accounts. Currently users can only have payments debited from their accounts within national borders.

The European Central Bank and the Commission have called upon banks to adopt common standards across Europe to facilitate payments being made in euros and boost trade within the euro zone.

However, SEPA may unfairly lock out payments providers such as PayPal and Hipay that don’t have links to a bank, according to a complaint. The complaint was lodged by Payment Network AG, a German online-payment provider with customers including Dell and KLM, according to Bloomberg.

While the Commission hasn’t reached any conclusions, it said the exclusion of such providers “could breach EU rules on restrictive business practices”.

Almunia welcomed SEPA but said competition must be protected in order to make sure consumers don’t end up paying more for transactions.

“In principle, standards promote interoperability and competition, but we need to ensure that the standardisation process does not unnecessarily restrict opportunities for non-participants,” he said in a statement.


The EPC has said the SEPA framework can support interoperability with existing e-payment plans, but that they must comply with certain criteria, such as in legal and security policies, in order to be allowed to participate in the system.

The competition commission is also currently investigating Google following an anti-trust complaint by Microsoft in the spring.

Separately, earlier this week the premium rate regulator, Phonepayplus, announced plans to clamp down on smartphone apps that are charging users without their knowledge or consent.

On Monday it published a ten week consultation on its proposed guidance for app-based mobile payments. This will be an extension of its outcomes-based code of practice that came into force on 1 September.

Essentially, the consultation is with the telecoms and digital industries, and it aims to come up with the best ways to prevent apps from charging users without warning.

Tom Jowitt contributed to this report.

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