SEPA Mobile Payments – An Introduction 5

When it comes to payments, there is a tremendous amount of buzz around mobile money payments. Its fair to say that various countries in Africa are leading the way when it comes to mobile money payments, and other regions are looking at the success and wondering if the model can be replicated. The EPC has released various white papers about SEPA mobile, the intention of this post is give you an overview and introduction to SEPA mobile payments (m-payments).

What are SEPA Mobile Payments?

The EPC is working with the relevant players in the mobile money space to create a secure and stable system that will enable the initiation and receipt of SEPA payments by mobile phone.

Why SEPA Mobile Payments?

Since most people in the SEPA zone (and outside of it!!) have a mobile phone, with various payment apps enabled, they are seen as a very accessible channel through which SEPA payments can be made.

What are the challenges?

As with any payment process simplicity, accessibility and security are key considerations and contribute hugely to the success/failure of the implementation. When it comes to mobile payments these same considerations become even more important because you very publicly carry the device (mobile phone) through which the payment is made.

What is EPC doing to enable SEPA Mobile Money Payments?

As with many pan-European initiatives the framework and consultation process takes time. The concept of mobile payments in SEPA has been kicking around since at least 2010.

October 2010 – The EPC and the GSM (Global System for Mobile Communications) published a paper ‘Mobile Contactless Payments Service Management Roles – Requirements and Specifications‘ which aimed to lay the foundation around how to implement Mobile Contactless Payments (MCP).

The GSM are a worldwide trade association representing more than 750 GSM mobile network operators across more than 200 countries, and incorporates more than 200 manufacturers and suppliers

Since 2010 various EPC white papers relating to SEPA mobile money payments have been released.  The white papers are essentially laying the foundations and building on the knowledge and information acquired from the previous publications. The intention of the papers can be summarised with the following:

• Inviting feedback from key stakeholders on the implementation of SEPA mobile payments
• Share the EPC’s commitment to enable SEPA mobile money (m-payments) payments
• Inform the stakeholders of the advantages of SEPA mobile money payments
• Share example of how the mobile wallet would enable SEPA mobile money payments
• Highlight the various models of mobile money payments in the marketplace

January 2014 – The latest SEPA mobile money white paper was released. Since this is the most recent, I will cover this in detail in a future post 🙂

May 2014 – this week the Euro Retail Payments Board (ERPB – formerly the SEPA Council) announced that it would be setting up 2 working groups to review:

• The post-migration issues relating to the SEPA credit transfer and SEPA direct debit schemes
• Pan-European electronic mandates for SEPA direct debits

The ERPB also indicates the possibility of creating working groups for mobile payments and innovative payments. Agree, this is vague and very ambiguous. But, given the above history, a focus on enabling mobile payments within the SEPA zone will surely happen at some point in the future!

 SEPA Mobile Payments – Where next?

While the world of mobile payments is complex and fast moving, enabling mobile payments in the SEPA zone will take time. The initial focus should of course be on the upcoming SEPA deadline, and managing any post migration issues. We also know that a 3 Month SEPA Consultation has also been started, the feedback from which will result in the publications of new SEPA rulebooks in November 2014. These rulebooks will be implemented in November 2015. Shortly after November 2015 we get into the realms of the February 2016 go live dates for niche products. So clearly the EPC will be, and rightly so, focusing on these upcoming deadlines.

Enabling mobile money payments alongside this will be a challenge, but represents a potentially huge opportunity. Mobile money implementations have almost entirely been national initiatives up till now – Kenya being the most widely cited example. Creating a secure, simple and accessible mobile money framework across the SEPA zone would be the first such example across multiple countries. Mobile money payments in Europe to date has been sporadic, only time will tell, but the SEPA framework may prove to be the tipping point in accelerating the use of mobile money payments across the SEPA zone. More soon….!