project currently stand? sepa was launched end - january 2008 ; six months after the launch, some changes are already visible. the number of sepa credit transfers is increasing though still low given that we are in a piloting phase. work in the other fields is advancing well. there are some concerns on the launch of the sepa direct debit but i believe that the market will live up to its commitments and solutions to all remaining issues will be found, especially now since the epc has agreed on some improvements in the sepa direct debit schemes to meet endusers ’ demands. the ecb is convinced that the sdd plays a crucial part in realising the sepa and will contribute to making it a successful project. the timely transposition of the psd into national law and clarity on the interchange fee for sdd from a competition authority perspective, are crucial to address most of the issues. the remaining problems regarding direct debits should be solvable, be it via upgrading the sdd rulebooks or via additional optional services offered by banks. but let ’ s be clear : stalling does not lead anywhere – it ’ s a loss of time and makes competitors who have started to act to be even stronger. running parallel systems is very costly. therefore a clear vision and a clear commitment is needed for the realisation of harmonisation and standardisation in retail payments across europe. how do cards and sepa go together? the sepa project includes a particular challenge. card payments represent an essential part of retail payments, which make the standardistation and the creation of card schemes are important element of the sepa project. over the last few years, volumes of cashless payments in the european union ( eu27 ) have increased by 7 % per year. 5 in europe card payments achieved the highest volume growth and have become the most widely used payment instrument after banknotes and coins, with over 25 billion payments per year. there is a lot to win in the field of cards. a bird ’ s eye view on the european card market, however, shows very fragmented national markets, especially regarding card schemes – even though for processors, integration has started. the market is divided into a number of national schemes and international schemes. but let me just add that the uk belongs to the few countries, 6 where one international scheme offers also the services of a national scheme. atkearney ( 2008 ) : the sepa shake out! challenges in cards and payments. other examples are austria

and cyprus. what are the benefits of sepa for card users? sepa for cards means : standardisation, integration instead of current fragmentation and more competition, more choice for consumers ( which schemes to use ), more choice for banks ( which schemes to issue and to acquire and which processors to use ), more choice for retailers ( which schemes to accept ) and more choice for infrastructures ( which schemes to process ). on top of this, a more efficient cards market will create incentives not to use cash as often – this is particularly important for consumers and banks. the potential benefit of cards replacing cash as a means of payment is considerable. for consumers, using cards instead of cash will considerably reduce transaction costs which are known to economists as so - called “ shoe - leather - costs ”. for banks, an increased use of cards would make cash handling less costly. for example, very often cash is withdrawn on friday, to be used at merchants on saturday and to be returned by them to the banks on monday. according to a recent survey, 7 the use of cards instead of cash is one of the most underestimated profitability drivers. an important step for banks, payment institutions and scheme managers towards an increased use of cards is to pursue the growth opportunities that this field offers. a big question, however, remains what overall impact sepa will have on card payments. even though the benefits are very clear, these can only be fully reaped if the card market is a competitive market with some variety and choice, instead of being limited to only a few players with a strong position in the market for card schemes. would sepa integration together with a strong position of current players in the card market mean that national schemes disappear without trace? this cannot be the case. atkearney ( 2008 ) : the sepa shake out! challenges in cards and payments. nonetheless, even if national card schemes will continue to exist, the integration of the european cards market will certainly bring changes. the opening of the national markets implies inevitably the potential for mergers, acquisitions, and sell - offs. more and more banks will be european banks, more and more processors will be european processors and even retailers will have and have already european wide presence. will the european card market seize the opportunity of change to construct something to its benefit? or will it stick to an agreement which will most likely be challenged sooner or later? what are current initiatives for an additional card scheme and what are the benefits? let me mention