New banking system soon

Nov 14 2007 by Peter McCusker, The Journal

A NEW universal EU banking system being launched in January could open doors to North-East exporters – but also increase competition from overseas.

Despite the fact that the EU has been a single market for goods and services since 1992, had common currency since 1999 and shared notes and coins since 2002, countries in the EU continue to maintain local banking systems and unique types of payment.

This means consumers cannot make the sort of payment across all EU countries that they take for granted in their home markets.

However, this is about to change with the introduction of the Single European Payments Area (SEPA).

From the beginning of 2008, banks across the EU will offer a range of common euro payments; direct debits will soon follow. At first these new SEPA payments will co-exist with traditional local types, but by 2010 local payments will be phased out as new pan-European systems are introduced.

Laurence Sweeney, international banking manager at the Royal Bank of Scotland, said: “The ability to use SEPA payments and systems to reach a Euro account anywhere in the EU will enable customers to consolidate bank accounts and concentrate cash, optimise balance management and drive meaningful cost-savings.”

“This will create both opportunities and threats to North-East companies who will have to look at their pricing structures.”

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