SEPA Credit Transfer
What is a Payment Scheme?
The Single Euro Payments Area (SEPA) payment schemes as defined in the SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) Rulebooks contain sets of rules and technical standards for the execution of SEPA payment transactions that have to be followed by adhering payment service providers. These rulebooks can be regarded as instruction manuals which provide a common understanding on how to move funds from account A to account B within SEPA. The schemes are based on technical standards defined by standards bodies such as the International Organization for Standardization (ISO). The SEPA schemes have open access criteria based on the Payment Services Directive (Directive 2007/64/EC of the European Parliament and of the Council of the EU of 13 November 2007 on payment services in the internal market). The SCT and SDD Schemes are developed by the European Payments Council (EPC) in close dialogue with the stakeholder community.
The SEPA payment schemes as defined in the SCT and SDD Rulebooks allow for flexibility and contain optional features enabling payment service providers to add features and enhance their core services. SEPA payment products and services offered to the customer are developed by individual payment service providers operating in the competitive environment. The development of payment products and services, based on the SEPA payment schemes, including all product-related features is outside the scope of the EPC.
The EPC is an international not-for-profit association which makes all of its deliverables, including the SEPA Scheme Rulebooks and adjacent documentation, available to download free of charge on the EPC Website (however, a payment service provider seeking to participate in the schemes should formally complete the Scheme Adherence Agreement and assume all the rights and responsibilities arising from admission to a scheme – more information is available in the SEPA Scheme Management Internal Rules).
Examples of rules and technical standards defined in a payment scheme
The following list includes examples of rules and technical standards that are typically defined in a payment scheme:
- Currency of the funds (money) exchanged - SCT and SDD: euro.
- Format of the account identifier - SCT and SDD: International Bank Account Number (IBAN - ISO Standard 13616).
- Standard data formats used to exchange messages between banks - SCT and SDD: ISO 20022 message standards.
- Rules for 'R' transactions (refunds, returns and rejects) - see SDD Rulebooks detailing rules for exception handling.
- Number of characters carried with remittance information - in the SCT Scheme: 140 characters of remittance information are delivered without alterations from the payer to the payee.
- Timelines to be observed by payment service providers when executing a payment transaction.
Given that there are some 36 billion euro credit transfers and direct debits processed annually by thousands of banks in the European Union (EU), an optimally efficient and integrated euro payments market will rely on payment scheme rules and technical standards that are adhered to by all European banks. This ensures the efficient straight-through processing of payments.
Selection of articles from the EPC Newsletter and other sources
- Single Euro Payments Area. Joint statement from the European Commission and the European Central Bank (Press Release of 4 May 2006)
- Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009 (the SEPA Regulation)
- SCT / SDD Rulebook Release Management and Scheme Development