‘The SPL scheme could be seen as a possible building block towards the development of pan-European payment solutions

19 / 09 / 2019

When it comes to the creation of new payment solutions, the finance market in Europe is looking for interoperability and a way to tackle fragmentation. Yves Mersch, member of the Executive Board of the European Central Bank (ECB), thinks that Europe should stop developing payments services that are only aimed on the national market. Mersch thinks that the creation of user-friendly pan-European payment solutions will not only improve ease of use, but also strengthen the competitive position of our continent.

‘The SPL scheme could be seen as a possible building block towards the development of pan-European payment solutions’

Fortunately, we’re now seeing that building blocks that can lead to important pan-European interoperable solutions are being developed. A well-known example is instant payments, which ensure the development of integrated payment structures in Europe, with a focus on collaboration, coordination and interoperability. There is also another initiative to accelerate the creation of a pan-European ecosystem: the Single Euro Payments Area (SEPA) Proxy Lookup (SPL).

This scheme, which is managed by the European Payments Council and for which equensWorldline was selected by the Mobile Proxy Forum (MPF) as preferred service provider, has been ready for market use since February of this year.

Easier, safer and less error-prone

In short, the SPL service makes it considerably easier for end users to make mobile person-to-person (P2P) payments securely and highly comfortable across borders and communities. Customers can use their mobile device to transfer money from their bank account to another individual’s account across Europe without manually exchanging payment information, such as IBAN. This method makes the payment process much easier, safer and less error-prone.

The SPL service is an intelligent European routing network among the connected P2P payment providers, which does not require the creation of a central IBAN database. It complies with legislation concerning the security and protection of personal data and contributes to the creation of a user-friendly pan-European payment ecosystem, one in which cross-border payments are just as smooth as the existing domestic payments. In this blog Christophe Godefroi, Senior Expert Standards and New Developments at the EPC, talks about where we stand with the SPL scheme and what the value of this scheme is.

Where are we at the moment on the development of the SEPA Proxy Lookup scheme?

Godefroi: "It is a key objective of the EPC that the SEPA Proxy Lookup (SPL) scheme is able to develop with an evolving payments market. To meet the demands of the scheme participants and stakeholders including end-users and Payment Service Provider (PSP) communities, the SPL scheme is subject to a change management process, which is structured, transparent, open and governed by the rules of the management and evolution function of SEPA Scheme Management. To this end, the EPC launched a three-month public consultation which ended on 26 August 2019 on possible modifications to version 1.0 of the SPL scheme rulebook. The publication of the next version of the SPL scheme rulebook is expected by April 2020."

Your aim is to grow gradually instead of with a big bang. Why did you choose for this approach?

Godefroi: "The decision to opt for an organic growth model was largely based on the EPC’s experience as scheme manager and on feedback received from the market in relation to the subject matter. It is clear that operating on a cross border level (compared to national) introduces an extra level of complexity that needs to be carefully assessed by the potential scheme participants. In addition, a number of countries have not yet implemented proxy lookup services locally. In view of this, the EPC never anticipated a ‘big bang’ but rather planned for a gradual deployment process. Even though there is already a considerable interest in several communities, the EPC is of the view that the attractiveness of the scheme will further increase following the integration of foreseen enhancements in the next version of the SPL scheme rulebook."

Do you agree that the Proxy Lookup Service is a building block towards possible pan-European payment solutions?

Godefroi: "The SPL scheme could indeed be seen as a possible building block towards the development of further pan-European payment solutions since it was created to cover the exchange of the data necessary to initiate payments between proxy-based payment solutions on a pan-European level. Moreover, work is ongoing in different European multi-stakeholder groups where this possibility is being assessed."

How do you see the development of the SPL service in the coming years?

Godefroi: "As mentioned earlier, it is important that the SPL scheme continues to develop in line with an evolving payments market. As a result, it is envisaged that the EPC might already launch a new change management cycle in the near future, with the aim of further enhancing the SPL scheme and its attractiveness."

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Paul Jennekens

Paul Jennekens

Head of Marketing, Worldline Financial Services
Paul has been working for this company since 2006. He has gained extensive experience in the payments field in various roles including Head of Product Management. In his current role as Head of Marketing at Worldline Financial Services, he is responsible for developing and implementing the marketing strategy and tactics with the main objective of becoming the leading payment processor towards financial institutions in Europe and beyond.