Paris, September 2009
EURO UNLIKELY TO BECOME VIABLE RIVAL TO THE US DOLLAR WITHOUT A EUROPEAN PAYMENTS STANDARD
Research by Atos Consulting indicates that as long as there is no single standard for electronic payments, it is unlikely that the Euro will become a serious alternative to the US Dollar
Despite being in existence for more than 10 years and being the world's second most traded currency, the Euro has not yet emerged as a true alternative to the dollar. Research from Atos Consulting shows that what is needed is regulatory stimulus to create a single electronic payments area in Euro zone. “A central government authority ought to be capable of taking appropriate measures in difficult times, providing the Euro with the credibility it needs as a global currency”, says Paul van der Knaap, partner at Atos Consulting and one of the authors.
SEPA is crucial to consolidate success
The introduction of the Euro has contributed to economic development and low inflation in the Euro zone. It has been beneficial to trade, and proven resilient in the current crisis. A single euro payments area (SEPA) is crucial in consolidating these successes. It adds to the risk reduction in the global financial system, and it greatens the transparency for all trade partners within and outside the Euro zone.
Decades of using different national payments systems and the current economic crisis hinder the transition to the SEPA schemes. Market demand grows for an intervention by the European Commission to set a deadline on the use of current national payment schemes.
Scenario planning
Recent research of Atos Consulting investigated future scenarios for wholesale payments in 2015, by applying the scenario planning methodology.
Various international experts from the banking industry were interviewed and workshops were set up in order to prioritize trends. Through the analysis of market trends a coherent set of future scenarios is depicted. Also, early warning indicators are provided to assess the impact of future events on the unfolding of the scenarios.
The research concludes that the future in wholesale payments is determined by the political and social economic trends underlying the market’s geographic reach and product portfolio. Geographic reach in particular turns out to be a driver that will be propelled by a credible currency – like the Euro – that is beneficial to global trading.
Four scenarios are described that originate from the extremes on these two aspects. Geographic reach in its extreme can be domestic (scenario A and C) or global (B and D). The product portfolio is primarily moulded by the market (scenario A and B) or through government regulation (scenario C and D).
A. Cocooning
In this market, services are delivered on a local-for-local basis. There is a focus on domestic client relationships, and the only regulations or standardisation come from the market players. Services are tailored to a geographical region that is limited in scope, and the same holds for client demand. Clients doing business on a more global scale, have to maintain different bank relations in different regions.
B. Tastes Differ
Services can differ entirely per region and/or per client, since there is no authorities’ regulated market. In this scenario, clients are serviced on a global scale, with products specific to local needs. For suppliers to offer local products in an efficient manner, they must find the greatest common denominator in their back-office processes.
C. National Colours
When products are standardised through authorities driven regulations and the geographical scope is domestic, the products and services – in fact the entire client relationship – gets a narrow local flavour. This situation will only exist for a longer period of time if there is enforcement from a regulator, since it will inhibit clients doing business efficiently on a more global level.
D. Global Village
This is a scenario where products and services are standardised through authorities’ regulation, and clients are serviced globally. There is limited variation in products, but on the other hand they are available wherever you are doing business.
Innovate the Euro
To retrieve maximum value it is beneficial for all players in this market to challenge their strategy against the scenarios presented.
“The job is not done yet, we need a single electronic payments area. This should not be and cannot only be a bank-driven project only. There is a social responsibility to bring the innovation of the Euro a significant step further by establishing a European payments infrastructure, and accelerate building a critical mass of users.” concludes Frans van Helden, partner at Atos Consulting.
The complete white paper can be downloaded from http://www.atosconsulting.nl/papers.
About Atos Origin
Atos Origin is an international information technology services company. Its business is turning client vision into results through the application of consulting, systems integration and managed operations. The company’s annual revenues are EUR 5,5 billion and it employs over 50,000 people in 40 countries. Atos Origin is the Worldwide Information Technology Partner for the Olympic Games and has a client base of international blue-chip companies across all sectors. Atos Origin is quoted on the Paris Eurolist Market and trades as Atos Origin, Atos Worldline and Atos Consulting.
About Atos Consulting
Atos Consulting, the global consulting practice of Atos Origin, is a leading provider of business, process and technology consulting services. With more than 2,500 staff globally, it focuses on delivering proven, pragmatic solutions to the telecom, manufacturing, financial services and public sectors.
About Atos Worldline
Atos Worldline is the European leader in electronic payments and transactions delivering innovative solutions to advance its clients’ businesses. It specialises in end-to end payment services (issuing, acquiring, payment solutions and card processing), services for financial markets as well as CRM and eServices (Internet, voice and mobile solutions). Every year Atos Worldline wins prestigious market awards in recognition of its continuous commitment to research and development of leading edge solutions. Awarded solutions cover expertise in areas such as mobile payments, secure IPTV, online CRM, paperless solutions. A 100% subsidiary of Atos Origin, Atos Worldline generates annual revenues of over €800 million and employs over 4,800 people in Europe. For more information, please visit: http://www.atosworldline.com
For more information and complete research:
Jose de Vries
+31 6 30 27 26 11
jose.devries@atosorigin.com
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