Additionally, they remain low-margin products, in contrast to credit cards. Therefore, the factor militating for Sepa is cross-border card issuance, and eventually global card issuance.
There has, until recently, been a lack of success of large banks from one country seeking to establish a retail presence inside other European nations’ borders. Important exceptions to this rule are Deutsche Bank’s historic presence in the Italian market and Santander Central Hispano’s purchase of Abbey National. Continental banks are therefore in a position to capitalise on the best of both worlds. The ability to expand across borders through acquisition or organically, combined with a unitary payments infrastructure, allows them to offer revolving-style credit cards to existing current-account customers, and to establish more traditional branch networks in new markets.
This article is based on TowerGroup research by Jim Eckenrode, managing director, banking and payments, at TowerGroup, a leading advisory research and consulting firm focused on the global financial services industry. He can be reached at jeckenro@towergroup.com
