SEPA - the opportunity for non-European Banks
I've read with interest the press release
from Wells Fargo this week stating the expansion of their Global Treasury Platform into Europe. I've long pointed out that SEPA (Single Euro Payments Area) creates an opportunity not just for European banks but any bank who wants to make payments in or out of Europe. I've recently written about this in these two reports - SEPA Redux: Understanding How We Got Here
and The SEPA Ripple Effect: Impacting a Non-European Country Near You Soon
. In short, it means that now a single format and connection - in theory at least at the moment - can reach every bank, corporate and consumer in 31 countries. Indeed, it can be argued that it benefits non-European banks more ad they have the advantage of not facing legacy migration issues. With the US being a key trading partner with Europe, some large but primarily (today at at least), domestic US banks have an opportunity to expand both their corporate and remittance transfer business. A a result, this move and others, such as that of Bank of America, came as no surprise. In fact, the surprise is that not more have done this. Perhaps we ought to rename SEPA Statesides' Europe Payments Access! Having been at the inaugural meeting of the IPFA (International Payments Framework Association
), I am probably biased, but I see this as being a way of further taking advantage of what SEPA has to offer to smaller US banks (it should be noted IPFA is not just a US channel, just that it is the first live connection). However, as with any new initiative, its not been without its issues. Teething problems perhaps, but its not quite delivering its potential yet.