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Single Euro Payments Area - new EC plans - briefing

10 September 2009
by eub2 -- last modified 10 September 2009

The European Commission has adopted a Communication on Completing SEPA: a Roadmap for 2009-2012 in response to the Communication on 'Driving European recovery'. The Single Euro Payment Area, or SEPA, is an initiative of the European banking sector and aims at creating an integrated market for electronic payment services in euros, with harmonised sets of business rules and technical standards. With these new European payments, consumers, companies, merchants and public administrations will be able to make payments under the same conditions throughout Europe as easily as within their own country. The Communication provides a framework for action within six priority areas where greater involvement of all relevant actors is required in order to achieve the full implementation of the Single Euro Payments Area (SEPA).


The Communication , which is also in line with the view of the European Central Bank (ECB), presents a series of actions to be undertaken by EU and national authorities, industry and users over the next three years. The Commission has identified six priority themes:

(1) Foster migration : Rapid migration is crucial in order to minimise the costly period of running legacy and SEPA systems in parallel. Public authorities should play a key role here. An efficient monitoring of the migration process will help anticipate and remedy possible migration problems. Setting an end-date to the SEPA changeover could significantly boost the SEPA migration process.

(2) Increase SEPA awareness and promote SEPA products : All parties involved in the SEPA changeover need to be fully informed about its numerous benefits. This could be achieved through tailor-made information and communication initiatives.

(3) Design a sound legal environment and strengthen SEPA compliance : The removal of legal barriers and the design of proper business models which are fully in line with competition rules are cornerstones for a smooth SEPA take-up and increased competition in the payments market. In a self-regulatory context, efficient compliance monitoring deserves special attention.

(4) Promote innovation : SEPA should be a driver for the modernisation of retail payment markets, facilitating the use of internet and mobile phones for making payments and promoting the development of environment-friendly e-invoicing solutions.

(5) Ensure necessary standardisation, interoperability and security : Interoperable, open and secure standards are essential in a network industry such as payments in order to reap the full benefits of SEPA.

(6) Clarify and improve SEPA governance
: An over-arching and efficient governance mechanism that meets the needs of the users is needed at EU level. The main objectives of the new governance structure should be to define a clear strategic vision for SEPA, monitor and support SEPA migration and ensure transparency and accountability.


While the banking industry has been successful in designing the necessary rulebooks for SEPA Credit Transfers (SCT) and SEPA Direct Debits (SDD), migration to the new S CT is currently lagging behind.

In July 2009, one and a half years after the launch of SCT, only 4,4% of all credit transfers used SEPA standards 1 . Whilst acknowledging that SEPA should continue to be an industry-driven project, it has to be ensured that SEPA is delivered on time and acts as a driver of greater competitiveness and higher growth, benefiting to businesses and citizens alike.

In its ECOFIN Council conclusions of 10 February 2009, the Council " recognised that the current financial crisis and economic slow-down provides opportunities for major efficiency gains and cost savings, thus requiring reinforced commitment to the project from all parties and invited the Commission and the ECB and the Eurosystem to continue their role in identifying the necessary actions for its successful realisation".

It can be expected that payment service providers will increase their focus on retail financial services in the future. Due to their pervasive role in our modern societies, integrated payment markets will therefore play a key role in the future of these banks. SEPA lays the necessary foundations for this.

Source: European Commission