Migrating to the Single Euro Payments Area: key facts

What is the SEPA migration end-date regulation?

Payments in euro throughout Europe need to work in a safe and efficient manner. For that reason, in March 2012 the European legislator adopted Regulation No 260/2012, which is also commonly referred to as the "SEPA migration end-date regulation". The regulation lays down rules for the initiation and processing of credit transfer and direct debit transactions denominated in euro within the European Union.

The regulation defines a clear timeline by when these rules need to be implemented in all Member States. For the euro area, the final deadline is 1 February 2014. The deadline for euro-denominated payments in non-euro area countries will be 31 October 2016. As of these dates, existing national euro credit transfer and direct debit schemes will have to be phased out and replaced by SEPA alternatives.

Each country must ensure that the migration from national payment products and services to the new SEPA instruments is conducted in accordance with the regulation. However, the market situation and the migration speed may vary greatly from country to country. Therefore, country-specific requirements may differ from the requirements set by the regulation. Individual national timelines may be longer or shorter than the general European level.

On 9 January 2014 the European Commission published a proposal for a Regulation amending Regulation No 260/2012, proposing an additional transition period of six months for the euro area. The ECB published a press statement and a legal opinion on the proposal. On 26 February 2014 Regulation (EU) No 248/2014 of the European Parliament and of the Council amending Regulation (EU) No 260/2012 concerning the migration to Union-wide credit transfers and direct debits was officially adopted.

Key dates

31 March 2012 Regulation No 260/2012 entered into force; pan-European reachability; phasing-out of €50,000 ceiling for equal charges to apply.
1 November 2012 Cross-border transaction MIFs (multilateral interchange fees) were eliminated for direct debits.
1 February 2014 SEPA migration deadline for SEPA credit transfer and SEPA direct debit within the euro area; no BIC (business identifier code) to be required for national payments.
1 August 2014 End of six month grace period for migration to SEPA instruments in the euro area.
1 January 2015 Migration deadline for SEPA direct debits in Latvia. Latvia joined the euro area on 1 January 2014. As a new euro area country, Latvia has up to one year to complete the migration. However, the stakeholders have agreed on an earlier end date for migration to SEPA credit transfers in Latvia, which is 1 January 2014.
1 January 2016 Migration deadline for SEPA credit transfers and direct debits in Lithuania. Lithuania joined the euro area on 1 January 2015. As a new euro area country, Lithuania has up to one year to complete the migration.
1 February 2016 No BIC to be required for cross-border payments; niche products migration complete.
31 October 2016 SEPA credit transfer and SEPA direct debit deadline for non-euro area countries.
1 February 2017 National transaction MIFs (multilateral interchange fees) to be eliminated for direct debits.

Specific requirements for businesses and consumers

  • Rules and standards for all credit transfers and direct debits denominated in euro
    The regulation stipulates rules and sets standards for all credit transfers and direct debits denominated in euro within the EU where the payment service provider (a PSP is a bank or other supplier that offers payment services) is located in the EU.
  • International Bank Account Number
    The International Bank Account Number (IBAN) is the standard governing European bank account numbers. By February 2014, the IBAN will be the sole payment account identifier for national and cross-border credit transfers and direct debits in euro within the EU.
  • Business Identifier Code
    The Business Identifier Code (BIC) may still be required until 1 February 2014 for domestic payments and 1 February 2016 for cross-border payments. Member States may defer the requirement relating to the provision of the BIC for national payment transactions until 1 February 2016.
  • Pan-European reachability
    Payment service providers cannot reject a SEPA credit transfer or SEPA direct debit transaction if they currently accept equivalent transactions carried out by national schemes.
  • Free choice of payment locations
    Payers cannot be restricted in choosing from which account in Europe they would like to make credit transfers or direct debits in euro. Neither can payees be forced to receive credit transfers or direct debits in euro in an account held in a specific country.
  • Additional debtor protection measures for direct debits
    Consumers may instruct their payment service provider on how to handle incoming collections by specific billers. They may draw up black lists or white lists of billers, set maximum amounts, or specify payment intervals. Additionally, they can block any direct debit collections from their payment account. In cases where a mandate does not provide for the right to a refund, consumers may instruct their PSPs to check whether the amount and periodicity of each incoming direct debit transaction is equal to the amount and periodicity agreed on the mandate.
  • Principle of equal charges
    Payment service providers must apply equal charges to comparable cross-border and domestic payments in euro within the European Union (Regulation No 924/2009). This principle of equal charges has been reinforced by the end-date regulation (Regulation No 260/2012), which has eliminated the € 50,000 ceiling under which equal charges could previously only be applied.
  • Resolution of conflicts and complaints
    Member States are to designate the competent authorities responsible for ensuring compliance with the regulation and establish bodies for the resolution of conflicts and complaints during the migration period.

Specific requirements for businesses only

  • ISO20022 XML message standard
    The use of the ISO20022 XML message standard is mandatory: i) between payment service providers; and ii) for the bundled transmission of credit transfers and direct debits in euro by business users that are not microenterprises (microenterprises have less than ten staff members and a turnover or a balance sheet total of up to €2 million).
  • Multilateral interchange fees eliminated for direct debits in euro
    Multilateral interchange fees (MIFs are fees applied between payment service providers in some Member States when passing on individual direct debits) are being eliminated for direct debits in euro. Such fees will be eliminated by 1 February 2017 for national payments and were eliminated on 1 November 2012 for cross-border payments. This could also lower the visible transaction fees for payees, to whom the costs of such MIFs are often passed on by their service providers.