SEPA is finally on the verge of coming into its own, but significant parts of the banking community either have forgotten or do not understand what SEPA is trying to achieve.

In this report, SEPA Redux: Understanding How We Got Here, Celent revisits why SEPA matters and how its future may play out. Many forget that SEPA is as much a set of principles as it is one specific thing. Indeed, SEPA is not just new payment types; it’s about rebuilding the payments business from the ground up to create competition at all levels of the business.

“In order to create competition, there is active intervention into the market, either directly or indirectly, by the regulator,” says Gareth Lodge, Senior Analyst at Celent and author of the report. “As a result, for banks, doing nothing is simply unlikely to be the answer.

In effect the regulator is made up of 20 distinct directorate generals, each with its own area of focus, so there is often conflict and contradiction from the regulator. In addition, there is the complicating element that they are trying to achieve political goals rather than delivering business benefits for all. As a result, some actions have some unintended consequences which aren’t always immediately obvious.