SEPA Vision for Cards
EPC Deliverables in the Area of Cards
The Single Euro Payments Area (SEPA) for cards sets the conditions to offer European cardholders general purpose cards to make euro payments and withdraw euro cash throughout SEPA, with the same ease and convenience as in their home country. It also enables European merchants to choose which SEPA compliant card acceptance brand and product they wish to accept and with which acquirer(s) (i.e. a payment service provider that services card-accepting merchants) they wish to contract, without this choice being artificially constrained by legal, technical, or procedural issues. European consumers benefit from wider acceptance of their cards within SEPA and more choice of card products than before. European merchants benefit from a more competitive acquiring market, and are able to choose which card schemes to accept and from which acquirer.
SEPA cards standardisation programme
The objectives of a SEPA for cards will be achieved through the use of harmonised, interoperable and free standards, which are openly available to all parties within the card payment value chain. The work of the EPC and the Cards Stakeholders Group (CSG) supports this vision. Created in 2009, the CSG is a multi-stakeholder body representing retailers, vendors, processors, card schemes and the EPC. The dialogue taking place in the CSG therefore, ensures the open and constructive co-management of the processes related to the identification of common standards requirements and implementation of best practices compliant with such requirements, which will promote interoperability and foster competition in the SEPA for cards. The CSG focuses on a cards standardisation programme that will create a better, safer, more cost efficient and functionally richer card services environment, whatever the card product or scheme may be. Specifically, the initiative aims at removing technical obstacles which prevent a consistent customer payment card experience across SEPA. The CSG encourages process efficiency throughout the card supply chain and, last but not least, adherence to the highest level of card payment security. The CSG develops and maintains the SEPA Cards Standardisation Volume (the SCS Volume). This document defines a standard set of requirements to enable an interoperable and scalable card and terminal infrastructure across SEPA, based on open and free standards.
In January 2014, the EPC together with the CSG published version 7.0 of the SCS Volume, ready for market implementation. The six books of the SCS Volume version 7.0 cover a set of requirements applicable to card present (face-to-face) transactions to allow investment decisions and implementation based on stable requirements. Card stakeholders are expected to get ready for market implementation by January 2017. For detailed information, refer to this dedicated EPC Website page: SEPA Cards Standardisation Volume Version 7.0.
In December 2015, the EPC together with the CSG published version 7.1 of the SCS Volume. The SCS Volume version 7.1 has been updated to include new functional and security requirements applicable to card-not-present transactions, and a cards processing framework. Requirements published in Volume version 7.0, applicable to card-present transactions, and the related implementation timeline, remain unchanged. All stakeholders and interested parties active in the SEPA cards domain are encouraged to roll out services and products in line with the requirements set out in version 7.1 of the SCS Volume in a three-year period, i.e. by December 2018. For detailed information, refer to this dedicated EPC Website page: SEPA Cards Standardisation Volume Version 7.1.
In February 2016, the European Payments Council (EPC) and the Cards Stakeholders Group (CSG) published a Bulletin that defines the recommended way to meet a major Interchange Fee Regulation (IFR) requirement. More precisely it addresses article 10.5 of the IFR which prescribes that by 9 June 2016 all cards be electronically identifiable enabling payers and payees to unequivocally identify which brands and categories of prepaid cards, debit cards, credit cards or commercial cards are chosen by the payer. This migration towards the market using this recommended electronic recognition may take time. Therefore a short term solution based on Bank Identification Number (BIN) tables made available to merchants should however allow meeting the regulatory deadline .
The Bulletin contents will be integrated in Volume v8.0 which is expected to be published at the end of 2016.
Card fraud prevention
Card fraud prevention is a top priority of the EPC. The EPC committed to migrate all SEPA cards and terminals to chip and personal identification number (PIN), based on the global EMV standards, by the end of 2010. With migration nearly complete, the focus now is on identifying and promoting measures to fight card fraud in a mature chip and PIN environment. In December 2010, the EPC approved the resolution 'Preventing Card Fraud in a Mature EMV Environment' (see below). This resolution sets the conditions for further increased security of card payments, based on the EMV chip only option and in the area of online payments with cards.
The SEPA Cards Framework is now retired
The SEPA Cards Framework (SCF), first created in 2005, has been one of the founding industry initiatives that helped to expand the acceptance and coverage of cards in SEPA. Owned by the EPC, this document has significantly contributed to the removal of many of the barriers to the development of the harmonised acceptance of all cards by merchants in the region. The SCF outlined high level principles and rules that when implemented by the card industry, contributed to deliver a consistent user experience to both cardholders and merchants when making or accepting euro payments or cash withdrawals (more info can be found on this page).
Whilst it has been much helpful to develop a ‘SEPA for cards’, it has reached the end of its active life in late 2015. To find out more about the reasons why it has been removed, read this EPC Blog.
The SCF remains available on the EPC website as a historical reference, but will not be active any longer.
Selection of articles from the EPC Newsletter and other sources
- European Central Bank SEPA Indicators
- EPC Publication: Shortcut for Merchants - the 10 Best Reasons to Practice SEPA
- EPC Newsletter: All Articles Published in the ‘SEPA for Cards’ Section