What is SEPA?
People travelling from one euro-area country to another can easily pay for goods and services in cash using the single currency. However, making cross-border payments within the euro area by other means (for example, by credit transfer or by direct debit) can be more difficult, due to technical, legal and market barriers that remain from the period prior to the introduction of the euro.
The Single Euro Payments Area initiative (SEPA) aims to overcome these barriers, thereby creating a single market for euro-denominated retail payments. SEPA will allow payment systems users to make cashless, euro-denominated payments to payees located anywhere in the EU and EEA, using a single payment account and a single set of payment instruments.
SEPA will have at least some impact on every citizen, merchant, public administration and corporate entity (regardless of size) currently holding a payment account with a bank. Holders of such accounts in all countries participating in the SEPA initiative (at the time of writing, the EU member states, together with Iceland, Liechtenstein, Norway, Switzerland and Monaco), regardless of their own location, will be able to make and receive euro-denominated payments, whether within or across national borders, under the same basic terms and conditions.
SEPA is not only about improving the processing efficiency of euro-denominated cross-border payments – it is a major project that will also have an impact on participating national payments markets. SEPA will introduce new business rules in relation to payments and implement common standards for issuing and executing electronic payment instructions in all participating countries. All electronic payments, both within and across national borders, will be affected and all credit transfers, direct debits and card payments will eventually migrate to SEPA standards.
A SEPA Migration Guide has been written to help businesses, public authorities and households prepare for SEPA. This Guide will be updated throughout the migration period as additional information becomes available.
The ECB has prepared a short (about 5 minutes) video introducing SEPA and explaining the background to this initiative which can be viewed here.
SEPA at a European level
SEPA is being implemented in thousands of banks in 32 countries – the 27 EU member states, together with Norway, Iceland, Liechtenstein, Switzerland and Monaco.
The European Payments Council (EPC) – an alliance of European banking/payments industry representative bodies – was established in 2002 to deliver SEPA. The EPC’s constitution gives it decision-making status on behalf of its payments industry members.
The EPC draws its representation from the three categories of banks in Europe – commercial banks, savings banks and co-operative banks. In Ireland, only those banks active in the retail payment system are represented. These are AIB, Bank of Ireland, Permanent TSB, Ulster Bank, National Irish Bank and BNP Paribas. The EPC has a number of working and support groups, the work of which is guided by a Co-ordination Committee; in addition, the EPC Plenary meets four times each year.
SEPA within Ireland
The implementation of SEPA within Ireland is overseen by the National Payments Plan (NPP) Steering Committee, which was established in 2012 to modernise the way payments are made in Ireland. A NPP SEPA Sub-group has been formed, consisting of representatives of consumers, businesses, Government and banks.
This subgroup has already met several times, and will meet monthly until the SEPA migration process has been concluded. Its role is to track the implementation of SEPA in the public and private sectors, and to co-ordinate communications and other initiatives required to ensure the successful implementation of SEPA.