Before undergoing major technical tasks related to preparing point-of-sale terminals for the Single Euro Payment Area, French terminal maker Ingenico SA says it will have a key voice in establishing security and payment scheme standards for the single European market.
With more than 4 million point-of-sale terminals installed in Europe, Ingenico should be in the planning of any changes related to SEPA payment-chain applications, Ottilia Rouguet, the terminal maker’s head of SEPA implementation, tells PaymentsSource.
SEPA creates a need for new applications for terminal security, interfacing between acquirer and merchant, and card authorizations with banks, she says.
The SEPA initiative, regulated by the European Commission and involving various other governing bodies, seeks to create a European market in which the euro is the common currency. Supporters believe SEPA would enable Europe to better compete in global commerce by establishing a single currency and system for cross-border electronic payments.
Converting much of the hardware and software for the various European payment schemes into a single market presents challenges, but Rouguet says Ingenico breaks down the complexities to two key areas–accepting cards at terminals and ensuring the terminal is security-standard compliant.
One SEPA goal emphasizes removal of technical barriers, with a key expectation being a cards system in which the consumer could use any card on any terminal, Rouguet says.
With that goal in mind, Ingenico is working with others in the European payments industry to establish an application so terminals could accept all EMV chip-and-PIN cards commonly used in Europe, independent of the card brand, Rouguet notes.
“EMV is not a final standard today because there are hundreds of different EMV applications, causing a major technical task. And we need to simplify that with an application that will handle all EMV cards,” Rouguet suggests.
The European Commission originally asked the 76 banks of the European Union to define SEPA card-use standards, but it became apparent vendors, merchants and acquirers needed to be involved, Rouguet explains.
As a result, the commission created the Cards Stakeholder Group, a consulting body for the European Payments Council represented by a mix of vendors, merchants, acquirers, banks and processors.
In working with that group, Ingenico helps develop pilots to test standards in the payment chain, Rouguet says.
OSCar, or the open standard for cards, tests for a SEPA-wide point-of-sale single-payment application and an interoperable terminal as an alternative to the country- or scheme-specific payment programs, Rouguet says.
OSec, or open standards for evaluation and certification, tests to determine the feasibility of a single SEPA security evaluation on payment terminals, she adds.
Ensuring terminals comply with the Payment Card Industry Data Security Standard presents one of the most challenging aspects of SEPA, and the hope is to have a process in place by early 2012 that eventually could become the standard, Rouguet says.
“Authorization of a transaction is challenging in a single-payment application because there are 60 different languages,” she adds.
One industry analyst believes the SEPA initiative could use a marketing boost.
“There is a real need to promote the benefits of SEPA, or the migration is likely to be more challenging,” Gareth Lodge, a London-based industry analyst with Celent, tells PaymentsSource.
The significant time and money spent by Ingenico, banks and the various governing bodies would be at stake if SEPA stalls because of lack of knowledge in the Eurozone countries, Lodge contends. He cites a European Union survey in which 46% of European businesses believed they were not well informed about SEPA, while 24% said they had not even heard of the initiative.
Lodge has conducted research for Celent regarding SEPA progress, its complexities and the need for a rebuilt payments system (
What do you think about this? Send us your feedback.
