Sepa basics
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The Single Euro Payments Area (SEPA) allows consumers and businesses to make cashless euro payments across Europe as easily as within a country. It aims to simplify cross-border euro payments through common standards. Key benefits include easier cross-border payments, lower costs, and more payment options for consumers, businesses, and public administrations across Europe. The European Commission, European Central Bank, and banking industry work together to implement SEPA standards and schemes like credit transfers and direct debits.
Sepa basics
- 1. Single Euro Payments Area Vikas Aggarwal May 27, 2014
- 2. Contents What is SEPA SEPAVision Need for SEPA Stakeholders in SEPA SEPA instruments Impact of SEPA on Payment Processing Benefits of SEPA
- 3. What is SEPA The Single Euro Payments Area (SEPA) is a project to allow consumers, companies and other economic actors will be able to make and receive payments in euro.The goal is to make payments in euro and across Europe as fast, safe and efficient as national payments are today. SEPA enables customers to make cashless euro payments to anyone located anywhere in Europe, for example by credit transfer, direct debit or debit card
- 4. SEPAVision Courtesy: http://www.kingcashcow.com/articles-2/ The SEPA vision was set out by the EU governments in Lisbon Agenda, March 2000 which makes EU more dynamic and competitive
- 5. Need For SEPA One currency: the euro is the monetary basis for SEPA. The single currency is the political driver For the establishment of a common market for payments One set of euro payment instruments – credit transfers, direct debits and payment card; efficient infrastructures for the processing of euro payments Common technical standards Common business practices A harmonised legal basis The continuous development of new customer-oriented services, for instance e payments or m-payments
- 6. Stakeholders in SEPA Political drivers of SEPA – EU Governments, European Commission and European Central Bank. European Commission: ◦ Represents the general interest of the European Union ◦ Driving force in proposing, administering and enforcing legislation. ◦ Chairs the EU forum on National SEPA coordination committees. ECB (European Central Bank) ◦ Central Bank for Europe’s Single currency – EURO ◦ Catalyst of the integration of the EURO payments market. SEPA Council Chair: ECB together with European Commission EBA (European Banking Association ◦ Drives Pan-European payment initiatives EPC (European Payment Council) ◦ Coordination and decision making body of the European Banking Industry ◦ Responsible for development and maintenance of SEPA schemes
- 7. 7 SEPA Instruments • SEPA Credit Transfer (SCT) • SEPA Direct Debit (SDD) • CORE Scheme • Business to Business Scheme • SEPA Card Framework (SCF) • Not an Instrument
- 8. 8 Payment Processing before SEPA Banking arrangements before SEPA. • CSM = Clearing and Settlement Mechanism •LVPS = LowValue Payment System • HVPS = HighValue Payment System Domestic transaction Cross BorderTransaction Europe Germany Netherlands CSM - LVPS CSM - LVPS CSM - LVPS CSM - HVPS CSM - HVPS CSM - HVPS United Kingdom
- 9. 9 Payment Processing after SEPA Banking arrangements after SEPA. SEPA PaymentsNon SEPA Domestic transaction Non SEPA Cross BorderTransaction Europe Germany Netherlands CSM - LVPS CSM - LVPS CSM - LVPS CSM - HVPS CSM - HVPS CSM - HVPS United Kingdom
- 10. SEPA Benefits Consumers ◦ Consumers will be able to reach all accounts SEPA-wide from one home country account. ◦ More widely accepted payments cards will displace cash improving customer safety and security. SME ◦ For smaller businesses (SME) faster settlement and simplified processing will improve cash flow and reduce costs. ◦ It will enable them to receive or make euro-payment anywhere within SEPA on the same basis. Merchants ◦ Merchants will be able to accept payment cards from all SEPA countries and back office processes will be simplified. Banks Banks will have opportunities to develop innovative products, enter new markets and win new customers as well as increase the efficiency of back office processes.
- 11. SEPA Benefits Corporates ◦ For large merchants and corporates, common standards enable the construction of one standard platform for payments in the whole SEPA resulting in major savings. For example, one single file in a common format could be used to receive and send payments throughout SEPA. Public administrations ◦ For governments and public administrations, common schemes and standards will enable the delivery of improved services to citizens at home and abroad. ◦ It will also facilitate the delivery of transaction-related e-Government services. Payment sector suppliers ◦ The payment sector suppliers will have an opportunity to develop low cost new technology products and services which will serve the single euro market. .
- 12. Courtesy http://blog.celtrino.com/2014/02/get-one-months-free-sepa-compliance- with-sepalink/#more-3864 Courtesy: http://www.kingcashcow.com/articles-2/ https://www.ebaclearing.eu/Overview-N=S2_Overview-L=EN.aspx