Single Euro Payments Area (SEPA): Sowing the Seeds for Growth
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Banks are facing a dilemma: the cost of providing a fully proprietary payments function in-house is unsustainable, but they cannot afford to break this link to customers by contracting services from a handful of global players.
The cycle of change in the payments industry brought about by successive waves of regulation, most recently SEPA, continues to accelerate. Industry analysts predict that banks’ payments revenues will be reduced by between 30% and 60% against a backdrop of increasing volumes.
Only the largest global payments players have the available capital and the payment volumes to justify the investment needed to adapt to this environment and continue to offer a broad range of payment services. Smaller regional banks that lack the scale or the ability to make the necessary investments will struggle to equal the cost structures larger institutions can offer.
