SEPA

SEPA (Single Euro Payments Area) was launched in 2002 , as an extension of the changeover to euro banknotes and coins. The aim of the project is to create a single set of euro-denominated payment instruments, to be used by all members of the European Union. These new pan-European instruments will replace existing national systems, enabling consumers, businesses, retailers and public administrations to make payments throughout the EU as easily as in their own country.

Why a Single European Payments Area?

The euro area is not currently in a position to reap the full benefits of European Economic and Monetary Union.

Due to the array of different national standards and instruments, consumers sometimes have difficulty making payments to other countries within the single currency area. Meanwhile, companies making frequent cross-border payments are often obliged to hold separate bank accounts in the countries with which they do business.

SEPA aims to overcome these difficulties by creating an innovative and competitive single market for all cashless retail payments in euro. The goal is to establish a unified area where customers can make and receive payments under the same basic conditions, regardless of their location.

To achieve this, the stakeholders have adopted an ambitious approach involving the creation of shared Europe-wide payment instruments that can be used in both cross-border and domestic transactions.

Creation of SEPA

SEPA was launched in 2002 by the European banking industry, with the backing of the main EU governing bodies. The first step was the creation in June 2002 of the European Payments Council, or EPC, a banking industry body charged with designing and developing a harmonized, Europe-wide payment area.

Between 2004 and 2007, the EPC defined the functional and technical characteristics for two new cashless payment instruments, the SEPA transfer and SEPA direct debit, and developed a framework for the interoperability of payment cards.

Under European regulation 260/2012 on the single European payment area, all national bank transfers and direct debits must be replaced by their SEPA equivalents by 1 February 2014. After this deadline, customers will no longer be able to make transfers and/or set up direct debits using their domestic systems.

Unlike transfers and direct debits, however, there is currently no SEPA payment card. Card payments in Europe are made using international (Visa, Mastercard, etc.) or national systems (such as the Groupement Cartes Bancaires or CB bank card group in France). The aim is to eventually make these systems interoperable in order to pave the way for a Europe-wide card payment scheme.

Implementation at national level

Responsibility for the actual implementation of SEPA falls to the national authorities in each European country. In France, the National SEPA Committee has been in charge of the project since 2006.

The National SEPA Committee is chaired jointly by the Banque de France and the French Banking Federation, and brings together representatives of all sectors affected by the changeover. Its main role is to identify the national payment instruments that will have to migrate towards the SEPA systems, and to manage the transition period during which both national and European systems will exist side by side.