Overview

• The business environment for the payment card industry in Europe is changing rapidly. Major aspects of these changes are the political pressure to migrate existing card payment systems towards a truly "domestic" acceptance system within SEPA and the increasing pressure from European regulators.
• Today the majority of transactions take place at a national level, where national efficiencies are proven and can be leveraged. In contrast, the solutions offered by the international card systems for the realisation of SEPA lead to higher costs than the current national solutions and the pressure on revenues in the card business is likely to increase further in the future.
• Through the "Berlin Group", major providers of the current national payment card systems have conducted a feasibility study to analyse an alternative approach to SEPA cards acceptance systems, which could save costs for the stakeholders of such a SEPA cards acceptance system.
• The feasibility study has identified a functional and technical architecture which:
  • can be implemented from 2006 onwards, based on a phased approach. A first phase, which relies only on bilateral agreements, could be expanded to a multilateral SEPA cards acceptance system during a second phase,
  • could save costs for the participants right from the start and has significant additional potential for cost-savings in the future,
  • is initially based upon bilateral negotiations,
  • is flexible enough to be adapted in its second phase to the emerging requirements of the EPC, the ECB and the European Commission.
• Based on this architecture, the feasibility study has delivered a set of common standards for the implementation of bilateral card transaction processing between acquirers and issuers in Europe
• The Berlin Group now focusses exclusively on the definition and maintenance of these Standards.