gertrude tumpel - gugerell : the progress of migration to sepa keynote address by mrs gertrude tumpel - gugerell, member of the executive board of the european central bank, at the british bankers ’ association, 7th annual payments conference, london, 23 november 2009. * * * thank you for inviting me to speak at the british bankers'association on the occasion of the 7th annual payments conference. 140 years ago, on monday 22 november 1869, one of the world ’ s fastest, most technically advanced and also most beautiful merchant sailing ships was launched. designed to be the first ship to bring home the new season ’ s tea from china to london, the “ cutty sark ” plied the oceans for decades. the ship is still preserved today, and you can marvel at her in greenwich, just 20 minutes from here. on monday 2 november 2009, just three weeks ago, the sepa direct debit ( sdd ) was launched. i will not dare to speculate as to whether it is the world ’ s fastest, most technically advanced and most beautiful direct debit scheme, but the advent of a european direct debit scheme provides a truly new payment service at the european level. we would like to congratulate all those who have taken part in its development, particularly the epc for their valuable contribution to this success. the sdd complements the sepa credit transfer, which was launched in january 2008. with these two payment products launched, and with the payment services directive ( psd ) now in force, sepa is well in place. however, not yet completed. hence, the keel has been laid for a single market for retail payments. and not just the single market for the euro area, but for europe as a whole. sepa and also the payment services directive ( psd ) are standardising retail payments across the eu - 27. so what does that mean for the uk market? the uk banking market is highly interconnected with the euro area. we also see that several uk banks are actively involved in the sepa process. they have recognised that the implications of sepa extend to their uk business too. ladies and gentlemen, sepa is not just about cross - border payments in euro and in continental europe, it is about changing the retail payments infrastructure throughout the whole of europe, including the uk, about bringing it up to a higher level of efficiency, quality and security. for example, the european psd will significantly

relevant authorities as well. the european commission is elaborating the possible modalities of such a “ sepa council ” and envisages the creation of a sepa council before the end of 2009. on sepa migration, challenges still lie ahead. the use of scts has been increasing steadily since their launch in january 2008. by september 2009, they had reached 4. 6 % of the overall credit transfer volume. 6 we also see some positive signs ahead : public administrations in several countries are planning to migrate to the sepa products either in the remainder of this year or in the first half of 2010. and now that sepa direct debit has been launched, companies with crossborder activities are expected to migrate. still, the current figures show : further action is needed to fully migrate to the sepa instruments. an end - date for sepa migration ; has the self - regulatory process reached its limits? this brings me to my second important ingredient for a successful migration to sepa : an end date for sepa migration. it is clear that maintaining dual systems is costly for all, not only for banks, but also for the sepa users. therefore, it is in the interest of all stakeholders to migrate quickly to the sepa instruments. so what will make industry and / or customers stop using the old products and switch to sepa? a sepa migration end - date for credit transfers and for direct debits would make clear that migration cannot take forever. the european commission in collaboration with the ecb, sct indicators ( see http : / / www. ecb. europa. eu / paym / sepa / timeline / use / html / index. en. html ). eurosystem is, therefore, investigating the possibility of a regulation to facilitate the migration to sepa. the eurosystem considers a legally binding instrument necessary for a successful migration to sepa and hence fully supports such regulation. i also see a lot of support for this way forward in the market. therefore, we should continue our efforts in setting a realistic but ambitious end - date for migration to sct and sdd to reap the full benefits of sepa. conclusion let me conclude. sepa is not just about making life easier for european citizens and companies by removing obstacles to cross - border payments. sepa is also about removing barriers to the single market, making payments more efficient, introducing more competition to the payments industry and speeding up innovation. hence,