Low demand forces VocaLink to drop SEPA services
Take up of SEPA payments has “simply not happened at the rate anyone thought it would,” prompting VocaLink, to announce that it will make a phased withdrawal of its Euro CSM and SEPA value added services.
Marion King, chief executive at VocaLink said that the move is “a straightforward response to market demand” and rejected suggestions that the decision reflects badly on the whole Single Euro Payment Area. “We’ve supported SEPA for a number of years and are not saying for a moment that SEPA won’t continue,” she said.
King said that VocaLink will continue to support existing customers and “manage a transition to their choice of clearing and settlement mechanism”. She declined to say how many customers are affected and added that the transition will “take as long as the customers need”.
The move took many industry watchers by surprise, including Aite Group senior analyst Enrico Camerinelli. Writing on the Aite blog, he said: “Banks and corporations will continue to cut costs in an increasingly competitive transaction banking space, and SEPA promises efficiency gains and lower costs; moving away from that promise in this climate is imprudent. I do not see any immediate reason for VocaLink to have cut its SEPA service, nor any corporate clients keen to dismiss SEPA-related services. Indeed, corporate treasurers welcome any form of cost savings and process improvement.”
Following a strategic review, VocaLink has created a Global Transaction Services team to deliver the innovations required by today’s evolving payments industry. Led by Marc Terry, managing director of Global Transaction Services, the team will deliver a range of services to global customers and partners based on its real-time payments expertise and presence in clearing and switching.
Terry said: ‘We have conducted extensive international research into the payments needs of our customers as well as the typical consumer which we will be sharing at this year’s Sibos conference. Overall, there is a widespread desire to move towards immediate payments. As the experts in this technology, VocaLink is best placed to support this innovation and assist our customers and partners in the delivery of next generation payments services.’
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