Currently, SEPA covers all EU Member States, as well as Norway, Iceland, Lichtenstein, Principality of Monaco and Switzerland. Private customers, companies and other economic entities may send and receive domestic and cross-border payments in euro under the same conditions, rights and obligations. SEPA enables customers to make cashless payments in euro to any beneficiary from a single bank account and using a single set of common payment instruments.
Incentives to initiate the SEPA project
Historically developed different retail payment markets in EU Member States prevent the utilisation of all opportunities presented by the EU internal market. Business companies providing services in several EU countries or natural persons changing their place of residence encounter particularity of local payment instruments. The adaptation not only takes time and additional costs, but also limits competition between payment services and the spread of innovations at the EU level. Moreover, the absence of common standards and efficient infrastructure determined a lower level of cross-border payment services than that of domestic payments.
EU institutions (European Commission, European Central Bank) are of the opinion that there should be no substantial differences between domestic and cross-border payment services in the EU internal market.
The main purpose of the SEPA project implementation
The purpose of the SEPA project is to expand the market where the same payment instruments are used. This is used to ensure a higher level of services, stronger competition, more effective products and cheaper methods for making payments and to create conditions for innovations and new services.
SEPA coordination and implementation
The SEPA initiative is coordinated by the European Payments Council (EPC). The project is also supported by the European Commission and the European Central Bank. The implementation of SEPA is divided into three stages. During the first stage – the design stage – payment schemes and infrastructure principles were developed. From the middle of 2006 to the end of 2007, payment instruments were developed, standards and infrastructure were tested and the interested parties completed the preparations. The last stage started in the beginning of 2008, on 28 January, when SEPA credit transfers were launched in the European Union . During this stage, national payment schemes are used jointly with the new SEPA credit transfer scheme. It is planned that by the end of 2010 SEPA payment instruments will largely replace the payment instruments currently used in national markets.
The European Central Bank and 16 euro area national central banks, taking into account the requests submitted by market participants, prepared a document, which describes the Eurosystem’s expectations regarding the implementation of SEPA. The text of the document is available here.