Firstly, the EACB would like to re-iterate its general position on SCT Inst:
- We support efforts to increase the uptake of SCT Inst and support the view that SCT Inst could facilitate stronger and more integrated homegrown pan-European payment solutions. Market adaption of SCT Inst has progressed well in terms of technical and process development.
- Adherence: we call upon EU banks to adhere on a voluntary basis to the SCT Inst scheme, which forms one of the major building blocks of a future pan-European solution. If adherence were to be mandated through legislation, PSPs must be given a sufficiently lengthy rollout period due to technical build and consumer considerations. The Commission should also carefully consider the needs and costs of SCT Inst for non-eurozone markets and PSPs. Moreover, it is important to take into consideration that some PSPs have very specific or ‘niche’ customers who do not need instant payments and therefore it would not be proportionate to mandate these PSPs to adhere to SCT Inst.
- The extension of the exemption period granted in November 2017 to the SCT Inst scheme under Article 4(4), of the “SEPA Regulation” for two more years, coupled with the reformulation of its second criterion by referring to a more concrete yardstick such as a majority of reachable payment accounts (instead of a majority of Payment Service Providers), would enable and support the smooth further development of SCT Inst.
- Business model: The Commission should focus on building an environment that supports the industry efforts to develop value-added products and solutions based on SCT Inst. This way PSPs will want to adhere, develop and promote the use of SCT Inst in order to compete in the new payments landscape. A strong business model and a clear, stable regulatory environment workable from both an economic and competition perspectives are key. EU-based PSPs need them to commit to invest in new and more efficient payment solutions based on SCT Inst and to remain competitive in a globalised economy. In order to offer use-cases other than account-to-account instant credit transfer between payment service users, banks themselves and/or together with service providers need to build interoperable front-end solutions for payers and payees adapted to the concrete use cases.
- SCT Inst should be considered the basis of new payment instruments in their own right, with different use cases, advantages and disadvantages and any potential legislative action should duly consider this. SCT Inst is not to be compared to any other payment instrument in a straightforward manner. Depending on the use case and method of initiation, SCT Inst transactions can have some characteristics of a traditional SCT and a card payment, or its usage could be envisaged in situations currently served by SEPA Direct Debits, cash or even cheques. It is therefore not useful to draw full parallels between SCT Inst and any of the other existing payment instruments. Some of the characteristics and existing legal requirements relating to traditional payment instruments may not be adequate in all use cases. Hence, the regulatory framework should consider instant credit transfer as a new, separate payment instrument.
- Market-led developments and uptake by market participants should be favoured. Any eventual legislative action should be targeted, proportional and limited to ensure a regulatory level playing field among all payment instruments in similar use cases or to remove regulatory obstacles for widespread adoption of SCT Inst. The Commission should investigate necessary basic parameters to support further instant payment solutions in a market-driven environment.
- We would welcome a leading role by public institutions and services in supporting, accepting and using instant payments.
For the full paper, please download the PDF.