Intellectual Property Rights and Standard Setting in Financial Services : The Case of the Single European Payments Area

For many reasons, payment systems are subject to strong network effects; one of those is the necessity of interoperability among participants. This is often accomplished via standard-setting organizations. The goal of the Single European Payments Area (SEPA) is to establish modern cross-boarder consumer payment systems for Europe. This too will require a standard-setting arrangement. But patents are also becoming an important feature of electronic payment systems and thus standard setting under SEPA should incorporate a policy to address the ownership and licensing of essential intellectual property. Using examples from the experience of European mobile telephony and financial patenting in the United States, the authors argue that the lack of a well-developed IP policy creates significant risks for participants in the new SEPA payment systems