The concept of cheaper cross-border euro payments is moving a step closer as a further 14 banks from the EU join the STEP2 programme as direct participants. The programme, created by the European Banking Association (EBA) as a pan-European clearing house, hopes to have more than 300 banking members by 2005: the year-end figure for 2004 will stand at 81. The STEP2 system processes around 110,000 payments every day and provides payments distribution to all banks operating in Europe's main financial hubs. Commission on cross-border trades previously stood at around ?24, but the system reduces costs per trade to less than ?0.5 on many transactions.
?STEP2 is the first development along the route to a pan-European ACH service. As we go along the route we'll develop a more efficient service and a cheaper service with flexibility to add on other pan-European services," explains Linda Smith, head of payments industry management and strategy at HSBC. "Having made that first step most banks think that European single payments must develop a lot further."
Corporates, so far, have played little part in the development of the programme, though arguably, will prove the main beneficiaries of cheaper cross-border costs.