This July, the European Union will present new rules to encourage a Single European Payments Area. However, cultural and regulatory differences prove to pose challenges for the EU executives involved.
With these new rules, which are basically an update for the EU’s Payment Service Directive (PSD II), the European Commission is aiming to level the card, internet and mobile payment services industry across Europe. This step is taken in order to decrease or even fill the gaps between countries with regard to payment as the rules on most European markets only apply to national players. The draft proposal, that EU website EurActiv
was allowed to peruse, states that the different payment systems in the EU indeed are not standardised and do not co-operate. Cultural Preferences
The European commission is planning on changing this situation radically, but a number of cultural hurdles must be jumped before this can actually happen.
Every European country has its own customs when it comes to payments: UK citizens, for example, use their payment cards more often than their counterparts on the continent. A report by the UK Cards Association has shown that in 2012, nine out of ten adults in the UK had a debit card, which adds up to a total of 47 million debit card holders. Researchers say this number is likely to grow as innovations will make card use even more convenient. This trend is supported by the global “payments readiness” index issued by MasterCard. Their results reveal that the UK is a great testing ground for European mobile payments. According to the index, “The United Kingdom much more closely resembles the United States, Canada, and Australia than it does Germany, France, and Italy.” Does everyone like online card payments?
Not every country in the EU is that big on card payment: MasterCard’s index revealed that in Italy, for example, “mobile payments remain in the nascent stages from both a market and a consumer-readiness perspective.” This has to do with the financial and regulatory challenges that have to be faced in the country, but also with the fact that Italians simply prefer cash payments. The differences between the UK and Italy are exemplary for the division that is apparent between the eastern and western countries in the EU. According to the Europe B2C Ecommerce Report 2013, modern payment methods are mostly used in large European countries such as Germany and France. The report also revealed that the fastest growing markets can be found in Central Europe and the Mediterranean. As these markets, which were formerly behind on the western one, are growing, a SEPA with pan-European mobile and internet payments might become reality.
As Europe is still the leading continent in terms of online retail, chances are the differences on the continent will level out soon. Trade group Ecommerce Europe expects that e-commerce over smartphones and tablets will reach a new peak in 2013. Its executive committee chairman, Wijnand Jongen, said that online consumers in the largest European countries are behaving “like youngsters,” to put it in e-commerce terms. As a contrast, consumers in the emerging countries “are like toddlers learning how things work and what the opportunities are.”
Jongen: “Over the next five-to-ten years, e-commerce will be immersed in every part of life, consumers will adapt, and this adaptation is exponential.” Marc Lolivier, vice president of Ecommerce and director-general of the French E-Commerce Association FEVAD, added: “Innovation and entrepreneurship in e-commerce is being promoted on a European level, also through the outstanding European companies leading the way into the new era of interactive retail.” Next to the abovementioned technology, these buying opportunities will play a big part in the way the SEPA will develop.