Frequently Asked Questions
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What is SEPA?
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What will SEPA deliver?
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What are the benefits of SEPA?
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Who are the key players?
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How is the UK involved?
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The role of the Payments Council
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SEPA misunderstandings clarified
What is SEPA?
SEPA stands for Single Euro Payments Area. It is the area in which individuals and businesses can make and receive card and electronic payments in euros, across Europe, simply, cheaply and efficiently, regardless of their location.
In other words it’s the creation of an integrated euro payments market, with a geographical scope that extends beyond the Eurozone to encompass all EU member states as well as Norway, Iceland, Liechtenstein, Switzerland and Monaco.
Following on from the introduction of euro notes and coins in 2002, it is viewed as a natural step towards the creation of a single market for Europe.
For further information: Making SEPA a Reality: The Definitive Guide to the Single Euro Payments Area
What will SEPA deliver?
SEPA requires the harmonisation, and ultimately the integration, of diverse existing national and cross-border euro payment systems, both at a technical level and in terms of customer services and procedures.
To help achieve this, the European Payments Council (EPC) has created a portfolio of SEPA schemes, which it defines as sets of interbank “rules, practices and standards”, providing a common understanding of “how to move funds from account A to account B” using a SEPA payment instrument.
These schemes then form the basis around which banks and other payment institutions can develop competitive products and value-added services to offer to their customers.
So far, three SEPA Schemes have been developed for making payments in euros:
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the SEPA Credit Transfer Scheme,
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the SEPA Core Direct Debit Scheme,
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the SEPA Business to Business (B2B) Direct Debit Scheme.
Further information about these schemes can be found in the SEPA Schemes section
What are the benefits of SEPA?
SEPA aims to deliver a number of economic benefits and is intended to provide a catalyst for future evolution and innovation. The launch of new SEPA payment products and services will offer businesses and individuals more ways in which to pay in euros – such as credit transfers and direct debits - as well as ensuring more widespread usage of plastic cards.
SEPA will also assist pan-European trade and help UK businesses compete by making it simpler and cheaper to send or receive euro payments. Larger businesses will probably have the most to gain, as they will find it easier to operate on a pan-European basis and to rationalise their cash management and card acceptance arrangements.
From a consumer perspective, it will make it easier to transfer funds between the UK and other SEPA countries for individuals who are working or studying abroad, or who have an overseas property.
People travelling within Europe on holiday or on business should see their UK-issued cards being even more widely accepted. The SEPA schemes give consumers more control over their payments - they provide customers with common rules, predictable maximum time cycles for both one-off and recurrent transactions and certainty that payments will be received without fees deducted.
For further information: SEPA Direct Debit for Consumers
Who are the key players?
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European Payments Council. This is the decision-making and co-ordination body of the European banking industry in relation to payments. It is composed of banks and banking associations from across Europe. One of the council’s objectives is to support and promote the creation of SEPA. Consultation with end users and suppliers takes place via stakeholder forums organised at a European level and in individual countries.
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European Commission. The commission helps to remove barriers to the creation of SEPA by introducing the Payment Services Directive to harmonise the European legal environment through standardisation of information requirements and the rights and obligations of payment service providers and users.
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European Central Bank. The ECB has provided guidance to the market by setting out its expectations regarding timescales and deliverables in a series of SEPA progress reports
Other important players include: the EU SEPA Council, the European Parliament, the European Central Bank, the Economic and Financial Affairs Council (ECOFIN), and the EU Forum of National SEPA Coordination Committees (EU Forum).
Further information about all the role of all of the above groups can be found in the EPC’s information document: Who is Who in SEPA
How is the UK involved?
Although the UK is a non-euro country and the number of cross-border euro payments to and from the UK is comparatively small, the UK payment industry is committed to making SEPA a reality.
A number of UK-based payment service providers, including many Payments Council members, currently offer SEPA credit transfer products to their customers. These institutions account for more than 85% of the UK payments market by volume. Customers of these institutions are able to make SEPA credit transfers from their accounts in the UK on a SEPA-wide basis.
To view a list of those banks throughout Europe that offer SEPA payments, click here.
It is likely SEPA will be of minimum importance to the vast majority of UK customers making sterling payments, as the sterling schemes will continue to operate alongside the SEPA versions. However, UK-based businesses and individuals who make or receive payments in euros will be affected by SEPA as its geographical scope extends beyond the Eurozone.
The role of the Payments Council
The Payments Council is working with the EPC to ensure that UK customers’ needs are taken into account. The UK EPC Group was created in 2002 to promote a co-ordinated approach to the UK’s involvement with the EPC on SEPA developments. The role of the group is to provide a forum for Payments Council members to discuss and formulate views on proposals arising from SEPA. The group will also consult with appropriate stakeholders and co-ordinate any collaborative actions that arise.
The Payments Council is also the UK’s National Adherence Support Organisation (NASO) whose role is to facilitate the adherance of UK-based payment service providers to the SEPA Credit Transfer Scheme and the SEPA Direct Debit Schemes. Any institution that meets the eligibility criteria set out in the scheme rulebooks can apply to become a SEPA scheme participant. To find out more about adherence to the SEPA Schemes, go to the section on adherence to the SEPA Schemes.