PM+: 'Harmonised vision' key to realising single euro payments area

Whether or not SEPA will deliver on its potential depends on the EU and governments agreeing on 'who should do what', argues Javier Santamaría.

By Javier Santamaría

04 Jul 2014

With the introduction of the euro in 1999, the political drivers of the single euro payments area (SEPA) initiative - EU governments, the European parliament, commission and central bank (ECB) - have focused on the integration of the euro payments market.

In September 1999, the ECB said that, "The substantial disparities between domestic and cross-border services... should ultimately disappear. Indeed, the single currency environment argues strongly in favour of a single payment area."

In February 2012, parliament and council adopted rules establishing technical and business requirements for credit transfers and direct debits in euro, known as the SEPA regulation.

That legislation defines 1 February 2014 as the formal deadline in the euro area for compliance with the core provisions of this regulation and October 2016 for non-euro countries. As of these dates, existing national euro credit transfer and direct debit schemes are replaced by harmonised SEPA payment schemes

According to the ECB, the vast majority of stakeholders in the euro area were expected to have achieved SEPA compliance by the February deadline. This being said, SEPA remains a work in progress and regulators will also claim a major role in determining how to achieve ‘SEPA 2.0’. To highlight just two examples:

In January 2012, the commission published its green paper ‘Towards an integrated European market for card, internet and mobile payments’. The commission's conclusions were also reflected with the 'payments legislative package', including proposals for a revised payment services directive (PSD2) and a new regulation on interchange fees for card-based payment transactions, published last July. Both proposals remain under review by parliament and council.

"Realistic targets – taking into consideration customer preferences – should be agreed when determining further EU action"

Late last year, the ECB announced the launch of the euro retail payments board (ERPB). This new entity, which represents both the demand and supply sides of the payments market, will, "help foster the development of an integrated, innovative and competitive market for retail payments in euro in the EU".

From our perspective, it would be welcomed if the authorities would keep in mind that payment habits and business models established on both the demand and supply sides will only change gradually once SEPA is achieved.

Therefore, realistic targets - taking into consideration customer preferences - should be agreed when determining further EU action.

We suggest that possible duplication of efforts by the ERPB and the commission be avoided. Whether or not SEPA will deliver on its potential also depends on the EU institutions and governments adhering to a harmonised vision of who should do what to achieve ‘SEPA 2.0’.

The European payments council has developed, in close dialogue with all stakeholders, the SEPA credit transfer (SCT) and SEPA direct debit (SDD) schemes.

The SEPA payment schemes as defined in the SCT and SDD rulebooks contain sets of rules and standards for the execution of payment transactions. These rulebooks can be regarded as instruction manuals, on how to move funds between payment accounts within SEPA.

Recently, on 19 May 2014, we launched a three-month public consultation on possible modifications to the SCT and SDD rulebooks.

We encourage all SEPA stakeholders to provide feedback by 15 August. The next generation rulebooks and associated implementation guidelines will be published in November and will take effect one year later.

For more information, visit the EPC Website (