Thanks to this project, citizens experience the same ease and convenience when making euro transactions across Europe with the same payment instruments – in particular credit transfers, direct debits and cards – as they do when paying within their home country.
The introduction of the euro as the official currency of several EU countries was just the beginning of payments harmonisation. To create a true single currency market – one of the components of the European single market – the EU authorities launched the SEPA project in collaboration with the EPC. The EPC represents payment service providers (PSPs) in relation to payment matters and is not part of the EU institutional framework.
To strengthen the euro as the common currency, the EU institutions called on the payment industry to develop a set of harmonised payment schemes and a framework for electronic euro payments. One major achievement of SEPA is the creation by the EPC of four euro payment schemes (the SEPA Credit Transfer (SCT), Direct Debit (SDD) Core, Business-to-Business and Instant Credit Transfer (SCT Inst) schemes). The SCT and SDD schemes integrated the multitude of existing national euro credit transfer and euro direct debit schemes into a single set of euro payment schemes and are now used for all euro credit transfers and direct debits in the countries participating in the SEPA project. The geographical scope of the SEPA schemes currently encompasses the 27 EU Member States plus United Kingdom, Iceland, Norway, Liechtenstein, Switzerland, Monaco and San Marino.
The SCT Inst scheme, which is optional, provides a pan-European solution for euro instant payments, a growing area of interest in the payment industry.
In addition, the SEPA project encompasses the creation of a SEPA for cards, which aims to ensure a consistent customer experience when making or accepting payments with cards throughout the euro area. The EPC supports cards harmonisation, notably via its contribution to the work of the European Cards Stakeholders Group.
What's next for SEPA?
The migration to the SCT and SDD schemes was mandatory for PSPs proposing euro credit transfer and direct debit solutions. It is now complete, but this does not conclude the SEPA project. EU regulators expect further harmonisation in the area of mobile (including Person-to-Person) and online payments. In these exciting times when digitalisation is transforming every aspect of our society and economy, there are still plenty of payment contexts where harmonisation is lacking and where the EPC continues to improve the ease and convenience of payments for European citizens and businesses.
Simplicity, convenience and efficiency are the three core benefits of SEPA. Consumers can now rely on one payment account and card to make euro payments wherever they are in Europe, which provides them peace of mind when they are travelling in Europe or making online purchases on websites based in other SEPA countries. Equally, enterprises see increased business opportunities and can more easily access a broad European market. As they do not have to deal with multiple payment card standards for euro payments, they save time and money.
In addition, SEPA creates a single market for payment services. The increased competition between PSPs and card service providers benefits consumers and companies alike, as they can enjoy a greater choice of highly competitive services driven by technological innovation.