Leo Lipis, chief executive and Colin Adams, senior consultant both of Lipis Advisors discuss their research on the wide range of regional payments projects and the factors behind successful integration at Finextra TV. Via Finextra: The success of regional payments projects. Their Swift working paper can be downloaded here.

Their conclusion in short:

Nevertheless, there are some factors that are absolutely essential to regional payments
integration, and while the lack of such factors in any one region could be a result of a conscious decision by stakeholders to keep integration limited, the “success” of regional payments integration depends heavily on the following five categories:
  1. Linkage of payments integration to a political goal
  2. Common currency / common settlement currency
  3. Centralized governance structure
  4. Common data standard
  5. Align the motivations of different stakeholders
Success can be defined in different terms in each regional payments area. On a technical and business level, implementing common standards or a common infrastructure that operates as planned can certainly be deemed a success. But no regional integration effort sees the execution of a cross-border payment as the end goal.
SEPA gets pretty high scores for the 5 categories for success as identified by Lipis. At a meta level I do not differ much from Leo and his colleague Colin on their SEPA assessment looking at how SEPA was established. At the same time I see many missed opportunities, a lack of true end-2-end interoperability and potential pitfalls when considering the way(s) forward.

When making the same assessment on how SEPA is moving forward today I would suggest lowering the ratings of four out of five categories: (1) less political attention now that SEPA has been established, (2) Multiple Currencies as of 2016, less alignment of stakeholders and especially the lack of a common financial institution wide approach (like the crucial EPC leadership in founding the SEPA frameworks) for standardization likely leading to fragmentation in new standards for e.g. XS2A.

What I miss in the research paper is the legal framework needed.