Finnish paper says Sepa 'not enough’ on its own

The single euro payments area (Sepa) is "not enough" to harmonise payment methods in Europe, according to a group of economists who call for "more to be done" in a discussion paper published by the Bank of Finland.

In Promoting efficient retail payments in Europe, Iftekhar Hasan, Emmi Martikainen and Tuomas Takalo argue that Sepa "does not automatically increase the speed of convergence of payment habits" across Europe, and "nor does it ensure that such convergence would lead to an efficient payment frontier".

The authors call for "vigorous competition and consumer protection policies as well as direct interventions discouraging large value cash payments" from the authorities. These would be particularly attractive tools, they say, as they would not require the use of taxpayers' money.

"Single Euro Payment Area (Sepa) is an important policy initiative to harmonise payment methods in Europe. But Sepa alone is hardly enough," they say. "Thus much more could be done to ensure the development of efficient retail payment infrastructure in Europe."