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Following his appointment as the new director general of the European Payments Council (EPC), Giorgio Andreoli speaks to VIXIO about PSD3, instant payments and the latest version of the request to pay scheme.
On April 1, 2023, Giorgio Andreoli began his new role as the director general of the EPC. A former managing director at consultancy Accenture, Andreoli most recently worked on the digital euro project at the European Central Bank.
Andreoli joins the scheme setting body at a significant period in the development of European payments. The European Commission is currently reviewing the revised Payment Services Directive (PSD2), proposals are being put in place for new instant payments legislation, while shifting payment habits and emerging technologies open up new market possibilities.
VIXIO caught up with Andreoli to discuss priorities and future plans.
As you begin this role, what are your priorities for the EPC?
As new director general of the EPC, I believe my first duty is to fully exploit the value of existing EPC assets, such as EPC payment and payment-related schemes, to help face all the forthcoming market challenges and regulatory requirements.
This means, primarily, consolidate and adapt to new regulatory obligations and market requirements, if needed; existing schemes already being used, such as SEPA Instant Credit Transfer (SCT Inst); and to communicate to the market the full value of more recent EPC schemes, including SEPA Request to Pay (SRTP), SEPA Proxy Lookup (SPL) and the newly-released One-Leg-Out Credit Transfer Instant (OCT Inst).
The digital transformation is heavily impacting the payment services value chain, facilitating the creation of new roles and business models. This is also clearly reflected at the regulatory level, where the Payment Services Directive will be extended and complemented by open data and open finance regulations. The consequences of these developments are likely to also come on the table of the EPC.
Regarding PSD3, what are your hopes for it?
The EPC is an association of members which may have different and sometimes conflicting views on policy and business matters, and as such we express only a technical opinion on regulatory matters. From a technical perspective, we hope that the forthcoming revision of the PSD2 will bring more clarity, for example, on how to effectively prevent certain fraud cases. We also hope it will further simplify and clarify topics today described in the questions and answers issued by the European Banking Authority (EBA).
What's happening with request to pay? Is there any momentum for this yet in Europe and, if not, why not?
Following three years of developments, which were necessary due to the complexity of the scheme and the wide range of use cases/scenarios covered, we are proud to say that the SRTP scheme is now fully ready and steady.
The third version of the rulebook was published on November 24, 2022, and will become effective on November 30, 2023. It includes all the functionalities needed to enable a proper functioning of the scheme and new optional functionalities requested by the market.
Furthermore, to secure the scheme, the EPC selected an independent homologation body and defined an homologation process open to PSPs, technical service providers (TSPs) and non-PSPs eligible to join the scheme, for example corporates and merchants.
Last but not least, the EPC defined a set of “default Application Programming Interfaces (APIs)” facilitating the interoperability between scheme participants, while ensuring that scheme participants are still left free to use any API of their choice, as available on the market.
Being a stable product, the SRTP scheme will now follow a regular maintenance cycle of two years aligned with the payment schemes’ cycle.
One of the big trends in recent years has been toward subscription services and recurring payments. How can SEPA schemes be developed to support this trend where there is a demand from businesses for easy-to-set-up, frictionless, regular payments?
Indeed, it is also reflected in our schemes such as SEPA Direct Debit (SDD) or SRTP.
For example, in the third version of the SRTP scheme rulebook, the possibility to send request for instalment payments was added. This function enables the payee to choose the number of instalments, the values of the different amounts and their respective requested execution date.
Subject to a prior bilateral agreement with the payee, the payer could choose the values of the different amounts and their respective requested execution date. This may be followed up under the SCT Inst scheme as well.
Also the SEPA Payment Access Account (SPAA) scheme allows for a wide set of subscription payments to be implemented.
Considering the push to make instant payments "the new normal in Europe", do you ever think that they will be used on a mass market basis, such as with merchant payments?
Instant payments have the potential to develop both in the person-to-person and person-to-business segments, in situations where cash and cheques are currently widely used.
This would reduce the cost of managing cash and cheques, which are currently the most expensive means of payment, and will also benefit the sustainability of payments.
The SEPA Instant Credit Transfer (SCT Inst) scheme coupled with other initiatives that boost the potential of real-time payments will make payments more convenient and efficient for European consumers, merchants, companies, public administrations and PSPs, and ultimately contribute to enhance the competitiveness of the European economy.
Do payments have any role to play in the environmental, social and governance (ESG) space? If so, how?
More and more companies and organisations talk about sustainability and are starting to take action to change their products to become more environmentally friendly and create a positive impact on society.
The payment space is not an exception as there are effective steps to make payments more sustainable.
We recently published a poll on our website and invited professionals working in the payments industry to answer the following question: “In your opinion, what are the most effective step(s) to make payments more sustainable?”.
The results showed a wide range of opinions, but it is worth highlighting the two leading answers: “using a mobile device (e.g. mobile phone, smart watch) and for example a digital wallet” (21 percent) and “opting for a digital receipt (or no receipt) over a paper one” (20 percent).
