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What is a payment scheme?

The payment schemes developed by the EPC are used by thousands of payment service providers (PSPs) in Europe to facilitate some 50 billion transactions each year.

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They are the building blocks of most PSPs’ euro credit transfer and direct debit solutions. They also enable their interoperability in SEPA.

A payment scheme is a set of rules which PSPs have agreed upon to execute transactions through a specific payment instrument (such as credit transfer, direct debit, card, etc). It is different from a payment system, which is a technical infrastructure that processes transactions in line with the rules defined in a payment scheme.

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Most euro credit transfers and direct debits rely on the EPC payment schemes

The EPC payment schemes are the rules underlying the euro credit transfer and direct debit solutions proposed by all PSPs in SEPA. Simply put, when doing credit transfers and direct debits in euro (in a single country, across SEPA or even between SEPA and a non-SEPA country), a service created on the basis of the EPC payment schemes may be used. These schemes make it possible for consumers to rely on just one payment account to make euro credit transfers and direct debits not only in their own country, but also in SEPA – an area larger than the European Union – and even between SEPA and a non-SEPA country.

Five payment schemes available

The EPC has created five distinct schemes:

  • The SEPA Credit Transfer (SCT) scheme.
  • The SEPA Instant Credit Transfer (SCT Inst) scheme.
  • The SEPA Direct Debit (SDD) Core (SDD Core) scheme.
  • The SDD Business-to-Business (SDD B2B) scheme.
  • The One-Leg Out Instant Credit Transfer (OCT Inst) scheme.

As a result of the SEPA Regulation, the SCT scheme and the SDD Core scheme are mandatory for all PSPs offering euro credit transfer and direct debit services in the European Economic Area. The SCT Inst, the SDD B2B and the OCT Inst schemes are optional: PSPs are free to propose services based on these schemes. Note: in October 2022, the European Commission launched a legislative proposal stipulating that PSPs based in the European Economic Area and offering standard euro credit transfers, must also offer instant euro credit transfers at a future point in time. This proposal has not yet been adopted by the EU co-legislators.

The EPC payment scheme rulebooks are publicly available on the EPC website. However, PSPs wishing to use them have to formally adhere to the schemes and pay an annual payment scheme participation fee. Adhering to the EPC payment schemes does not require EPC membership.

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Harmonised rules that leave room for flexibility

The EPC payment schemes attach the general rules enabling harmonised credit transfers and direct debits. Yet they also allow PSPs to provide additional services of their choice to the actual payment products in order to meet specific customer needs.

The payment schemes are composed of various elements
Each EPC payment scheme is made up of:
  1. A rulebook. This contains the set of business rules, obligations, and technical standards for the execution of payment transactions. It can be regarded as an instruction manual that provides a common understanding on how to move funds from account A to account B. For example, the rulebook defines in which currency (euro) a transaction must be made, and the various steps and maximum duration PSPs have to respect for such transactions.
  2. Implementation Guidelines (IGs). These are the technical translations of the rulebook into ISO 20022 payment messages.
  1. The Payment Scheme Management Rules. This document – common to all schemes – explains the principles governing the administration and evolution of the scheme.

In addition, the EPC publishes clarification papers on a case-by-case basis covering specific topics related to the schemes’ implementation.

All the EPC payment schemes respect the principles defined in the Payment Services Directive, and are overseen by the Eurosystem.