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Single Euro Payments Area (SEPA)

What is SEPA?

The Single Euro Payments Area (or “SEPA” for short) is where more than 500 million citizens, over 20 million businesses and European public authorities can make and receive payments in euro under the same basic conditions, rights and obligations, regardless of their location.

The introduction of the euro has helped to make cash payments anywhere in the euro area just as easy as at home. But until recently it was not so easy to pay for goods or services electronically in another euro area country, for example with your bank debit card - a means of payment favored by many Europeans today. And when you wanted to transfer money from your home bank account to an account in another euro area country, the payment could take much longer, and sometimes the beneficiary did not get the full amount.

What are the benefits?

SEPA made all electronic payments in the euro area as easy as cash payments. You can make fast and secure transfers between bank accounts anywhere in the euro area. And if you are shopping abroad, you can also use your bank debit card to make a payment in euro, as you would in your home country.

SEPA also means better banking services for all: transparent pricing, valuable guarantees ensuring that your payments are received promptly and in full, and banks assuming responsibility if something goes wrong with your payment.

The overall gains expected from SEPA for all stakeholders has been evaluated at €21.9 billion per year by PWC in 2014 confirming a Cap Gemini study of 2008 evaluating these benefits at € 123 billion cumulated over 6 years.

SEPA Regulation

The SEPA Regulation (EC 260/2012) adopted in 2012, aims to create the reality of a European Single Market for retail payments. The SEPA Regulation marked 1 February 2014 as the point at which all credit transfers and direct debits in euro would be made under the same format: SEPA Credit Transfers and SEPA Direct Debits.

An amendment to the SEPA Regulation introduced a transition period of six months – until 1 August 2014 – to ensure minimal disruption for consumers and businesses.

SEPA: a collaborative work

The Single Euro Payments Area (SEPA) is an initiative of the European banking industry that will make all electronic payments across the euro area – e.g. by credit card, debit card, bank transfer or direct debit – as easy as domestic payments within one country are now. The SEPA project is strongly supported by the European Commission and the European Central Bank. The SEPA Council, that will soon be replaced by a new governance body, the Euro Retail Payments Board (ERPB), puts together all the stakeholders of the payment market and aims at facilitating the set-up and smooth transition to SEPA.

SEPA Migration

The European Commission, together with the ECB, closely monitors the migration of each Member State towards SEPA.