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Commission and ECB provide further clarification to ensure timely launch of SEPA direct debit scheme

24 March 2009

The European Commission and the European Central Bank (ECB) are today issuing a joint statement providing further clarification, with the aim of encouraging the European Payments Council (EPC) to launch the SEPA direct debit (SDD) scheme on 1 November 2009.

In particular, the Commission makes clear that a general per transaction multilateral interchange fee (MIF) for direct debit transactions does not seem justified for efficiency reasons and, therefore, does not appear compatible with EU antitrust rules. The Commission and the ECB also note that the forthcoming approval of the revised Regulation on cross-border payments will provide a three-year transitional regime for the SDD business model. The clarifications provided today are aimed at the long term, i.e. after 1 November 2012 and are based on earlier statements issued by the Commission and the ECB. [1]

Competition Commissioner, Neelie Kroes, stated "The Commission will ensure that SEPA will be subject to effective competition so that a fair share of the benefits resulting from the creation of SEPA's direct debit scheme, both on a cross-border and domestic level, are passed on to consumers and companies".

Internal Market Commissioner, Charlie McCreevy, stated "The benefits for companies and consumers of the Single Euro Payments Area are tremendous; with this hurdle crossed, banks and creditor companies can start preparing for migration".

ECB’s Executive Board member, Gertrude Tumpel-Gugerell, stated “The launch of SEPA direct debit is vital for the success of SEPA. We acknowledge that, after having provided clarity on the applicability of multilateral interchange fees during an interim period, this further clarifying position of the Commission now provides a clear scenario also for the long term".

The Commission considers that a general per transaction MIF does not seem necessary for direct debit transactions. Such MIFs paid by creditor banks to debtor banks for direct debits cannot, in general, be justified for efficiency reasons, and it appears unlikely that they would be compatible with EU antitrust rules, either for national or for cross-border transactions. After 1 November 2012, they should, therefore, have been replaced by other mechanisms, at the national and at the cross-border level, for both SEPA direct debits and for national, or legacy, direct debits.

Direct debit payments are typically used by consumers to pay for recurring payments, such as rents, mortgages, energy bills, telephone bills and magazine subscriptions, etc. Under the SDD, bank customers would, for the first time, be able to arrange to pay their bills by direct debit to and from bank accounts in any of the 31 European countries participating in SEPA.

The direct debit market is a two-sided market in which creditors have a clear interest in attracting debtors to engage in a direct debit relationship. Creditor companies have effective means of encouraging customers directly to make use of direct debit, in particular by granting rebates to them.

An MIF for error transactions could, nevertheless, be envisaged as it may create an incentive to avoid such error transactions and, therefore, encourage the efficient functioning of the SDD scheme. The Commission and the ECB stand ready for discussions on this.

The joint statement issued by the Commission and the ECB is available on the ECB’s website.

For further details on SEPA, see:
  1. [1] See


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