SEPA - The Single Euro Payments Area

SEPA has changed the European payment landscape

Within the Single Euro Payments Area (SEPA), the European payments landscape is effectively borderless. Cashless payments such as credit transfers and direct debits involving countries from the SEPA community are just as simple, quick and cost-effective as domestic payments.

Credit transfers, have been part of SEPA since January 2008. Whereas national payment schemes differed considerably before, new technical standards and harmonized formats are now in operation, allowing companies and consumers to use the SEPA Credit Transfer (SCT) to make euro credit transfers across Europe under the same terms and conditions.

A similar simplification has been realized for direct debit payments through the introduction of two SEPA Direct Debit (SDD) instruments – the SEPA Core Direct Debit and the SEPA Business-to-Business Direct Debit – in November 2009. Besides the capability to replace the current domestic legacy direct debit schemes, the SEPA Direct Debit can also be used for cross-border direct debits. Cross-border direct debits did not exist before the creation of this instrument.

The slow pace of migration from existing credit transfers and direct debits to SCT and SDD, particularly between small and medium sized enterprises (SME) has led the European Commission to present a proposal for a one-off transition period of up to six months – to August 1, 2014.

Meaning, a dual system will exist in most countries in which, both, the SEPA instruments as well as the legacy instruments will be accepted (This exclusively relates to credit transfers and direct debits under the collection authorization procedure (Einzugsermächtigungsverfahren), but not to direct debits under the debit order procedure (Abbuchungsauftragsverfahren). The additional transition period in the Euro countries can vary from country-to-country and differs for Deutsche Bank booking locations from six weeks to six months. Please refer to the detailed country-by-country overviews as provided by the European Central Bank (ECB) and Euro Banking Association (EBA): Link.

Further information about SEPA can be found in our SEPA brochure entitled “The Ultimate Guide to SEPA Migration”.

Your contacts at Deutsche Bank will be happy to answer any questions that you may have about your payment transactions.

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SEPA Newsletter #18

The migration of mass payments to SEPA almost been completed. However, so-called niche products and card-based transactions still need to be migrated. Our 18th newsletter "SEPA – Euro Payments" contains details of expected changes in 2016.

Click here to download the SEPA Newsletter from our SEPA Newsletter Archive.

Click here to order future editions of our SEPA Newsletters
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Last Update: 12.6.2015