Single Euro Payments Area: Is Europe's card business making the major changes that were widely predicted or is the whole initiative going flat?

When the Single Euro Payments Area (SEPA) initiative started back in 2002, lofty ambitions and objectives were voiced by many people, although in private there were a number of industry players who hoped it would be a short-lived fascination and that normal service could quickly be resumed. Six years on, and with the first migration date of January 2008 already behind us, headlines are starting to appear in various media outlets suggesting that SEPA is failing to deliver. This paper looks behind the headlines and analyse the real state of SEPA's health, especially as regards its effects on the payment card business. It discusses the background to the SEPA initiative, highlighting the key strategic targets agreed upon and the intended consequences of implementation; the realities that have dawned as the process of implementation has begun; the evidence of measurable progress; and the potential for positive future outcomes. It concludes by offering a frank, though ultimately positive assessment of the prospects for SEPA in the short and medium term.