Single Euro Payments Area (SEPA)
SEPA is a harmonisation programme aimed at creating a single, transparent payment market for domestic and cross-border euro transactions, as mandated by the European Commission. The programme is led by the European banks, grouped together in the European Payments Council. SEPA is a natural development following the introduction of the euro, as it will improve and facilitate the free movement of goods and services within the European Union. With SEPA, citizens and companies in Europe will be able to make cross-border euro payments throughout Europe as easily, safely and efficiently as they make domestic payments.
On 14 February 2012, the final step was taken and SEPA legislation was officially passed by the European Parliament. The legally binding deadline for phasing out the domestic credit transfer and direct debit is 1 February 2014. This is a major milestone in European payment history as it means that SEPA is now, more than ever, a reality for all of us: businesses, consumers and banks across Europe.
Benefits
Businesses can benefit from SEPA in three areas:
- Increased speed: transaction processing times will be maximised.
- Enhanced reliability: guaranteed transmission of remittance data will facilitate automatic reconciliation and rejects. Also rejects and returns will be handled in a predictable way.
- Increased efficiency: standardisation of payment products and processes facilitates straight trough processing (STP).
The impact and potential benefits of SEPA are largely dependent on the nature of your business. In general, the larger your company, the larger the impact and the greater the potential benefits. Elements that could be affected by SEPA include currently used payment products, banking connectivity channels and IT systems. In addition, existing payments and cash management processes and procedures are likely to be affected.
Migration
In January 2008, the first SEPA products were introduced: European credit transfers and card transactions. ING is one of the first banks in Europe to offer clients the possibility to use European direct debit immediately following its launch on 2 November 2009. Other products, such as e-invoicing and mobile payments, are being developed as well.