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About SEPA

SEPA Vision and Goals

What is SEPA?

The Single Euro Payments Area (SEPA) is the area where citizens, companies and other economic actors can make and receive payments in euro, within Europe, whether within or across national boundaries under the same basic conditions, rights and obligations, regardless of their location. The geographical scope of SEPA encompasses the 27 EU Member States, Iceland, Liechtenstein, Norway, Switzerland and Monaco.

SEPA is a policy-maker-driven EU integration initiative in the area of payments designed to achieve the completion of the EU internal market and monetary union. The SEPA vision was defined by EU governments in the Lisbon Agenda, which envisages the EU internal market as the most competitive knowledge-based economy globally. The Lisbon Agenda describes the integration of euro payment markets as a prerequisite to realise this vision. Following the introduction of euro notes and coins in 2002 the political drivers of the SEPA process - the Economic and Financial Affairs Council (in short: ECOFIN, comprising the EU Economics and Finance Ministers), the European Commission, the European Parliament and the European Central Bank (ECB) - therefore called on the payments industry to bolster the common currency by developing a set of harmonised schemes and frameworks for electronic euro payments.

The European Payments Council (EPC) defines the SEPA payment schemes and frameworks necessary to realise the SEPA vision (see "About EPC").

Are SEPA Payments for cross-border Use only?

No. SEPA envisions one integrated euro payments market. Within SEPA, all euro payments will be domestic. Once SEPA is achieved, there will be no differentiation between national and cross-border euro payments. As such, SEPA payment instruments are designed to eventually replace national euro payment instruments existing today.

What are the Benefits?

SEPA offers significant benefits for bank customers. The implementation of innovative and competitive SEPA payment services based on global ISO (International Organisation for Standardisation) standards translates into efficiency gains for businesses and public administrations: common standards, faster settlement and simplified processing will improve cash flow, reduce costs and facilitate the access to new markets.  Consumers can rely on a single set of euro payment instruments covering 32 countries: one bank account, one bank card, one SEPA Credit Transfer, one SEPA Direct Debit.

Moreover, bank customers will take advantage of increased competition in the payments market. According to a study (Capgemini) conducted at the request of the European Commission, the replacement of existing national payment systems by SEPA holds a market potential of up to €123 billion in benefits, cumulative over six years and benefitting the users of payment services. The EPC makes available a series of publications pinpointing the impact of SEPA on different stakeholders including consumers, businesses, public administrations and the IT community (see "SEPA Customers").

The impact of SEPA, however, transcends monetary policy and payment services. The European Commission expects the legal and technical SEPA harmonisation exercise to facilitate the dematerialisation of business processes by replacing paper-based procedures with standardised electronic solutions such as e-invoicing, for example.

Make SEPA a Success!

The European banking industry has successfully delivered innovative and commonly applicable SEPA payment schemes and frameworks. It is now up to the political drivers of the SEPA initiative - EU governments, the European Commission and the European Central Bank - to facilitate the migration of bank customers to the new SEPA instruments (see "The political Initiators").

Set a Migration End Date!

The EPC recognises the value of setting a deadline for migration to SEPA services. An end date for phasing out legacy euro payment instruments creates awareness, ensures planning security for all market participants and confirms the commitment to making SEPA a reality. In the view of the EPC, mandating an EU-wide end date would require EU regulation. The European Central Bank stated that a migration end date is needed from which point onwards only the European payment instruments will exist. The European Parliament already in March 2009 called on the European Commission to set a "clear, appropriate and binding end date, which date should not be later than 31 December 2012 ".

In  December 2009, the ECOFIN stated that "establishing definitive end-dates for migration [to the SEPA Credit Transfer and SEPA Direct Debit] would provide the clarity and the incentive needed by the market, ensuring that the substantial benefits of SEPA are rapidly achieved and that the high costs of running both legacy and SEPA products in parallel can be eliminated". The ECOFIN therefore invited the European Commission, in collaboration with the ECB and in close cooperation with all actors concerned, to carry out a thorough assessment of whether legislation is needed to set binding end-dates and to come up with a legislative proposal should this assessment confirm that need.

The market is now awaiting the results of this assessment.

More News about SEPA

To facilitate access for all interested parties to key SEPA concepts, the EPC cooperates with several organisations active in the SEPA roll-out.  Links to the websites and/or newsletter of these organisations are provided here.

ECB

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