Out-Law News | 01 Aug 2014 | 3:45 pm | 1 min. read
The Commission said that the complete migration in the eurozone to the common Single Euro Payments Area (SEPA) standards, from a myriad of national standards that governed credit transfer and direct debit transactions previously, was a "real success".
"In all euro countries citizens have now available a common and simple way to pay at home and across borders: SEPA credit transfers (SCT) and SEPA direct debit (SDD)," the Commission said. "Faster and safer transfers between bank accounts in the euro area will benefit the European economies at large."
In geographical terms, SEPA refers to all 28 EU member states, Iceland, Liechtenstein, Norway, Switzerland and Monaco. In an effort to boost cross-border electronic payments across the 'single euro payment area' (SEPA), new rules were designed to standardise payment schemes. Specific rules were imposed for EU countries to adhere to regarding SEPA payments regardless of whether the individual countries in the EU have adopted the euro as their currency.
Common rules for the authorisation and the revocation of direct debits are set out in the Payment Services Directive while further technical specifications for the payment systems, and compliance deadlines, are set out in the SEPA Regulation and the rulebooks that have been developed alongside it.
Under the SEPA Regulation, payment service providers must establish "payment schemes" that have the same "rules" for the purpose of carrying out cross border and national euro currency credit transfers and direct debits. The measures are designed to ensure that different payment systems are "technically interoperable" with one another.
The Regulation sets out certain requirements that payment service providers must conform to when conducting those transactions, which include using a particular "payment account identifier" and "message formats", among other things.
All eurozone countries had been given a deadline of 1 February this year to implement the SEPA standards but that deadline was extended to 1 August as part of a transitional arrangement after the Commission had raised concern about the number of businesses unprepared to comply with the new payment processing standards ahead of the 1 February deadline.
The deadline for non-eurozone EU countries to ensure compliance with the new SEPA standards is 31 October 2016.