Sweden is part of Europe and, as an EU member, we are affected by initiatives that are taken there. As Sweden's only clearing house for mass payments, Bankgirot must constantly follow these initiatives and ensure that the Swedish payments market is at the forefront of development and competitiveness.
EU harmonisation in banking and finance
Work has been going on within the EU for many years to harmonise the member countries' legislation in the area of banking and finance, and not least in the area of payments. Being able to move funds and make payments across borders within Europe has been a clear focus area for the EU, since this facilitates the movement of labour and capital, which is a fundamental EU principle.
Unified payment structure for stronger European integration
As early as 1990, the idea arose within Europe to strengthen European integration and Europe's competitiveness internationally by means of a unified payments structure for mass payments in euros. Local payment services in Euros are to be replaced with standardised rules for payments, which are expected to give better service, more effective products and cheaper payments alternatives.
The initiative that was set up to promote this is called SEPA, the Single Euro Payments Area. The European Commission is the driving political force behind SEPA. Historically, the idea of SEPA started in 1990 with the European Commission's report ”Making Payments in the Internal Market”, which described the vision of a unified payments market.
Bankgirot has streamlined the processing of payments
The Swedish mass payment market has been characterised by a high level of efficiency and technical innovations. As payments have become ever more complex, so the Swedish payment infrastructure has also been developed. Today the total amount of so-called mass payments represents the greatest proportion of the payments that are performed in Sweden.
Over the course of around 50 years, Bankgirot has played a decisive role in the market by streamlining the processing of payments. Instead of the organisations on the market exchanging payment information between themselves, this is handled centrally by Bankgirot. This makes possible extensive specialisation and standardisation, which gives economies of scale, joint operation benefits and network effects. Even though the existing payment infrastructure is effective, a number of changes and driving forces are occurring that have led Bankgirot to initiate a comprehensive programme of work so as to be able to design Bankgirot's future payment infrastructure. SEPA and the changes that are occurring in Europe are strong contributory factors in this.
Increased competition and more focus on costs
In parallel with developments in demand on the payment market, payments in Europe are being harmonised as a result of the EU regulations Single Euro Payments Area (SEPA) and Payment Services Directive (PSD), as well as the international standard ISO 20022. In the short term, this harmonisation will probably lead to consolidation of clearing houses in Europe and a growth in pan-European payment offerings. Several clearing houses currently have a commercial business model with an expansive growth strategy. Consolidation leads to increased competition and greater focus on costs, which drives Bankgirot's need for change and future solutions for payments in order to remain a competitive clearing house.
In order to ensure that Bankgirot is in the forefront of this development, Bankgirot participates in several fora in the European arena, including as one of the founder members of EACHA, the European Clearing Houses Association, the primary aim of which is to promote SEPA's implementation and progress in Europe.
The needs of our customers are changing
The participants' needs have also changed in recent years. Their customers' activities have become ever more international, which means that in many cases the participants have followed their customers outside Sweden's borders and become established in more and more countries. As part of this international development, the range of platforms and processes has increased.
To streamline business, a standardisation is being performed so as to offer more homogeneous solutions, but also so as to be able to reduce costs. This is not just about reducing the participants' external costs for national and international payments, but also their internal costs.
Finally, it has become increasingly clear in recent years that the participants wish end customers to use the participants' own interfaces and that the banks are increasingly packaging payment services with their own solutions.