Paul Gogarty (Dublin Mid West, Green Party)
Link to this: Individually | In context

Question 62: To ask the Minister for Finance when he will adopt the new single euro payments areas scheme; when he plans to end domestic schemes; the transition phases involved; and if he will make a statement on the matter. [8537/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

Payments systems deal with the transfer of money (funds) between bank accounts. While each member state has effective payments systems at national level, the integration of the single market in financial services has been hindered by the lack of cross-border interoperability between national payments systems. For some years now the payments industry has been working to improve the dynamics of cross-border business activity by developing a pan-European electronic payments system for payments in euro. It is called SEPA (the single euro payments area).

SEPA will be an area where consumers, companies etc can make and receive electronic payments in euro in Europe – whether between or within national boundaries, under the same basic conditions regardless of location.

The key components of SEPA are the new payments systems for:

· SEPA Credit Transfers (SCT), that is, making payments electronically from or into bank accounts, including the use of internet or telephone banking and which was launched on 28 January 2008;

· the SEPA Cards Framework, also launched on 28 January 2008; and

· the SEPA Direct Debit Scheme (SDD), which was launched on 2 November 2009.

SEPA relates only to electronic payments and industry has a key role to ensure that competitive SEPA-compliant services are placed on the market. The Irish Payments Services Organisation, which administers domestic payment schemes on behalf of Irish banks, has put in place a national SEPA migration plan for the industry here. I look forward to the industry's roll out of each of the above components of SEPA.

Notwithstanding this, Government policy is to promote the increased use of electronic payments throughout our economy. In promoting this policy objective, I have reduced stamp duty on combined ATM cards from €10 to €5 in budget 2009, building upon changes in the previous year's budget. I also increased stamp duty on cheques, from 30 cent to 50 cent per cheque, to further disincentivise cheque usage.

In relation to my own Department's involvement in the SEPA project, the Deputy may be aware that the Payment Services Directive (PSD) provides the necessary legal framework to support the implementation of SEPA. It came into effect on 1 November 2009 and my Department transposed it through the European Communities (Payment Services) Regulations 2009 (S.I. No. 383 of 2009) to enable Ireland to apply the PSD's provisions by that date.

As regards plans to end domestic schemes and transition periods, there is currently no specific end-date for SDD and SCT migration. Notwithstanding this, the Deputy may be aware that the ECOFIN Council Conclusions of 2 December 2009 considered that establishing definitive end-dates for SDD and SCT migration would provide the clarity and the incentive needed by the market and asked the Commission, in collaboration with the ECB and in close co-operation with all bodies concerned, to carry out an assessment of whether legislation is needed to set binding end-dates for SDD and SCT and to come up with a legislative proposal should this assessment confirm the need for binding end dates. My Department is monitoring the position and will assess any such proposal in due course.