The Single Euro payments area (SEPA) originated in 2008 but unfortunately both bank and corporate adoption has been slower than anticipated. To overcome this slow adoption, the European Parliament has announced a fixed migration deadline for the adaption of all Euro payments to SEPA.
What is SEPA?
SEPA is the Single Euro Payment Area, covering the whole of the Eurozone, the European Economic Area (EEA) plus Liechtenstein, Iceland, Norway, Monaco and Switzerland. SEPA is a political initiative driven by the European Commission to replace domestic payment systems with a European-wide standard. Within SEPA there are new payment systems for handling Direct Credit (SCT) and Direct Debit (SDD). Using the SEPA payments systems it is now possible to send or receive money across the whole of the SEPA zone as if it were one big country with no borders.
How does SEPA affect me as an SME?
SEPA is for everyone. Even smaller businesses can take advantage by using a SaaS supplier like Sentenial to lower the barriers to entry, allowing easy access to European payments. SEPA makes it easier for businesses to trade across European countries, allowing you to more easily expand your market.
How does SEPA affect me as a large Corporate?
SEPA is a regulation supported by the European Union. In the future we will all need to move to the new SEPA payments instruments. By adopting SEPA early, you gain first mover advantage, will have a longer period for pilot system trials and parallel running allowing you to migrate on a timetable dictated by your business, not external factors.
In addition to early adopter benefits, SEPA itself offers several advantages. By moving to SEPA you can simply your banking relationships, reduce banking costs and simplify cash pooling.
What is a SEPA Credit Transfer SCT?
The SEPA CreditTransfer Scheme is a cross-border non-urgent euro payment scheme. It allows transfer of payments to be made between any of the 31 SEPA countries, including euro payments within the UK. Once the bank receives the instruction from the person making the payment, the person being paid will receive the monies within 3 working days.
What is the PSD?
The Payment Services Directive (PSD) provides the legal foundation for the creation of an EU-wide single market for payments. The PSD aims at establishing a modern and comprehensive set of rules applicable to all payment services in the European Union. The target is to make cross-border payments as easy, efficient and secure as ‘national’ payments within a Member State. The PSD also seeks to improve competition by opening up payment markets to new entrants, thus fostering greater efficiency and cost-reduction. At the same time the Directive provides the necessary legal platform for the Single Euro Payments Area
What is an e-mandate?
The SEPA Direct Debit schemes include the possibility to create mandates through the use of electronic channels. The e-mandate brings further advantages to debtors: the debtor avoids the inconvenience of printing, signing and mailing a paper form to the creditor by using a fully electronic process. The e - mandate facility is based on secure, widely used online banking services of the debtor bank and is an optional service offered by banks.