About the project

Timeline

Official start in 2002

Since the establishment of the European Economic Community in 1958 there has been a progressive movement towards a more integrated European financial market. This movement has been marked by several events. In the field of payments, the most visible were the launch of the euro in 1999 and the cash changeover in the euro area countries in 2002. Less visible, but also of great importance, were the establishment of the large-value central bank payment system TARGET in 1999 and that of its successor, TARGET2, in 2007.

Low-value euro payments, however, continue to be handled and processed in many different ways across Europe. As a result, fees for making cross-border payments within the EU have always been very high when compared with those for domestic payments. A European regulation on cross-border payments in euro (Regulation 2560/2001) stipulated, among other things, that payment fees could no longer be higher for cross-border euro payments within the EU than for corresponding domestic euro payments. In response to this Regulation, in 2002 the European banking industry created the European Payments Council (EPC), as the coordination and decision-making body for payment issues, and launched the Single Euro Payments Area (SEPA) project. Today, the EPC consists of members from 32 countries, composed of banks, banking associations and payment institutions.

SEPA in phases

January 2004-June 2006: Design phase

In the initial phase, the European Payments Council (EPC) designed the rules and practices for the new payment schemes and selected the standards to be applied.

June 2006-January 2008: Implementation phase

During this phase, banks created the products they are now offering their customers. They also tested the new SEPA products. Each participating country set up national implementation and migration bodies which prepared the roll-out of the new SEPA instruments, standards and infrastructures. The European Commission created the legal basis in the form of a Directive.

January 2008-today: Migration phase

Migration means that both providers and users of payment services move to SEPA. Banks, payment institutions, clearing and settlement infrastructures, card processors and card schemes need to adapt their products and services, and users need to adopt them.

 Past events

Proposal on end-dates for SEPA migration

The European Commission proposed on 16 December 2010 that pan-European credit transfers and direct debits - complying with EU-wide standards and requirements – should replace national instruments. This changeover should take effect within one year for credit transfers and within two years for direct debits after the entry into force of the Regulation.

In connection with this proposal, ECB Executive Board member Gertrude Tumpel-Gugerell said, "I very much welcome the European Commission's proposal on an end-date for migration to SEPA by means of an EU Regulation. It will help to realize the benefits of SEPA making payment services for domestic and cross-border transactions more efficient and serve corporate and private households. Almost ten years after the introduction of euro banknotes and coins, using common payment instruments will be an important further step to integrate the financial services in Europe and complement the Single Market for goods and services. I would therefore like to encourage the Hungarian Presidency, the Member States and the EU Parliament to give the proposal its full attention aiming for a smooth and quick adoption."  European Commission’s regulation proposal, ECB's opinion, Legal basis

Dimensions

How large is SEPA geographically?

SEPA covers not only the euro area, but the whole of the European Union (EU) as well as Iceland, Liechtenstein, Monaco, Norway and Switzerland. This means that communities outside the euro area can adopt SEPA standards and practices for their euro payments. SEPA is thus a key piece in the establishment of a single market for payment services in Europe.

Some numbers regarding SEPA:

• 32 countries in Europe participate in SEPA (i.e. legal requirements and participation of banks are set);
• more than 458 million citizens can make SEPA payments;
• more than 4,400 banks have signed up for SEPA credit transfers;
• more than 2,600 banks have signed up for the SEPA core direct debit scheme;
• more than 2,400 banks have signed up for the SEPA business-to-business direct debit scheme

Which elements does SEPA cover?

• The euro. The single currency is the monetary basis for SEPA. It is also a major political driver: the idea of using the same kind of money necessitates the establishment of a common market for payments.
• A single set of euro payment instruments.
• Efficient infrastructures for the processing of euro payments.
• Common technical standards.
• A harmonised legal framework.
• The ongoing development of new services.
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Vision

SEPA Vision

“The Commission and the ECB see SEPA as an integrated market for payment services which is subject to effective competition and where there is no distinction between cross-border and national payments within the euro area. This calls for the removal of all technical, legal and commercial barriers between the current national payment markets.”

• Source: Joint statement from the European Commission and the ECB, May 2006, cs . da . de . el . en . es . et . fi . fr . hu . it . lt . lv . mt . nl . pl . pt . sk . sl . sv
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“SEPA will be the area where citizens, companies and other economic actors will be able to make and receive payments in euro whether between or within national boundaries under the same basic conditions, rights and obligations regardless of their location within Europe.”
Source: European Payments Council, December 2004