Any personalised device(s) and/or set of procedures agreed between the payment service user and the payment service provider and used by the payment service user in order to initiate a payment order.
The Single Euro Payments Area, or SEPA, is an area in which consumers, companies and all other users of payment services can make and receive payments in euro under the same conditions and with the same rights and obligations, regardless of their location within Europe. SEPA covers 34 European countries: the 28 Member States of the European Union, as well as Iceland, Norway, Liechtenstein, Switzerland, Monaco and San Marino.
SEPA is also defined as an industry project and a political process, which both aim to remove the legal, commercial and technical barriers that currently still separate national payments markets.
Consumers and companies will become accustomed to common, basic, similar-functioning payment instruments and services in euro, with which they can reach any payment account holder in order to make or receive payments in euro. Payment service users will be able to compare conditions and quality and choose the most attractive offer, without having to take into account the location of the payment service provider. All payment service providers are subject to EU-wide legal requirements and obligations, mainly under the Payment Services Directive, Regulation (EC) No 924/2009 and Regulation (EU) No 260/2012.
The payments industry is responsible for the creation of solutions to remove technical and commercial barriers in the euro retail payments market. The Eurosystem and the European Commission steer, monitor and foster SEPA’s progress, both at the national and the European levels. The legal foundations have been laid down by new European legislation since 2001 in line with the high-level objectives of Economic and Monetary Union.
SEPA is a long-term project (see timeline). An important milestone was reached on 1 February 2014, the legal end date for migration to SEPA credit transfers and SEPA direct debits in the euro area (there was grace period until the 1 August 2014 for the processing of legacy payments). The deadline for EU Member States with other currencies, applicable to payments in euro, is 31 October 2016. The EU regulations also require the use of certain common standards and technical requirements, such as the use of International Bank Account Numbers (IBAN) and the financial services messaging standard ISO 20022 XML.
No, SEPA does not only cover the euro area. Market communities outside the euro area have also adopted SEPA standards and practices for their euro payments. However, legal coverage applies to the countries within the EU/EEA only.
No, this is not possible. SEPA credit transfers and SEPA direct debits are made in euro. They can only be made for a payment account located in a country in the Single Euro Payments Area. This area comprises the 28 Member States of the EU, as well as Iceland, Norway, Liechtenstein, Switzerland, Monaco and San Marino.
No, SEPA payments can only be processed in euro.
Making retail payments faster, especially cross-border payments, was one of the prime initial policy objectives of SEPA. This objective has been clearly met for cross-border payments: since 1 January 2012, the Payment Services Directive has obligated all EU payment service providers to adhere to strict time limits in the execution of their payments (“D+1”). The impact of SEPA on the speed of execution of retail payments at the national level will, however, be less obvious, as, for instance, the starting conditions have varied substantially across the different countries.
In principle, yes. SEPA companies and consumers are free to choose the location of their payment account; they should, therefore, be able to make their choices based on the level of service and the fees within a competitive European market for retail payment services in euro.
Setting the actual level of charges is at the discretion of each individual payment service provider and is subject to market competition. Transparency vis-à-vis charges for the payment services offered needs to be ensured by the providers: the Payment Services Directive details the information to be given to users before the service is actually used, including, inter alia, information on the processing times and applicable charges.
Regulation (EC) No 924/2009 removes any discrepancies between charges for cross-border and national payments in euro. Payment service providers must apply equal charges to comparable cross-border and domestic payments in euro within the EU. This principle of equal charges was reinforced by the SEPA migration end-date regulation, which has removed the €50,000 ceiling previously set.
The European Commission provides more information on the principle of equal charges. Please refer, in particular, to the FAQs on this page. If you would like to follow up on a specific case or issue, having read the FAQs, two lists can be consulted, one under the national competent authorities link and one under the national out-of-court and redress bodies link.
Regulation (EU) No 260/2012 establishes 1 February 2014 as the official end date for migration to SEPA of the euro area countries and 31 October 2016 for the other EU Member States. From these dates on, all legacy credit transfers and national direct debits in euro will be replaced by SEPA credit transfers and SEPA direct debits. The regulation also requires the use of certain common standards and technical requirements, such as the use of International Bank Account Numbers (IBAN) and of the financial services messaging standard ISO 20022 XML for all credit transfers and direct debits in euro in the EU.
The European payments industry has jointly developed payment instruments that can be used all over Europe. Yet, the market incentives to actually use them instead of national legacy instruments were not strong enough to trigger significant migration to SEPA. For the payments industry, the parallel operation and processing of both national and SEPA credit transfer and direct debit schemes is rather costly. Furthermore, the full benefits of SEPA will only materialise once migration is complete. The Eurosystem and several other major stakeholders, therefore, stressed the need for the establishment of an end date to ensure full migration from national credit transfer and direct debit schemes to their SEPA alternatives.
Regulation (EU) No 260/2012 enabled EU Member States to establish waivers for some specific requirements for a limited period of up to two years. An overview of national options for waivers that were actually enforced can be found on the website of the European Commission. The website of the European Central Bank provides country-specific fact sheets on these transitional waivers, on the competent national authorities and on the penalty provisions.
Reachability refers to the obligation of payment service providers to ensure that any payment account that can be used for sending or receiving credit transfers and/or direct debits in euro at the national level can also be used for sending or receiving equivalent SEPA credit transfers and/or SEPA direct debits in euro.
According to the reachability requirement established under Regulation (EU) No 260/2012, all payment service providers that process legacy credit transfers or direct debits must also process SEPA credit transfers or core SEPA direct debits, respectively. However, reachability for business-to-business direct debits is only optional. The European Payments Council manages the public registers of all participants in SEPA credit transfers and SEPA direct debits.
No, the SEPA migration end-date regulation covers retail payments denominated in euro only.
Regulation (EU) No 260/2012 has made the use of the ISO20022 XML message standard mandatory: i) between payment service providers; and ii) for the bundled transmission of credit transfers and direct debits in euro between business users and their payment service providers; micro-enterprises (with less than ten staff members and a turnover or a balance sheet total of up to €2 million) and consumers are not subject to this requirement.
Member States may waive this requirement until 1 February 2016. Information regarding those Member States that have opted for this waiver can be found on the websites of the European Commission and the European Central Bank.
The Eurosystem publishes a set of quantitative indicators on migration to SEPA.