There are two major milestones for the establishment of SEPA:
For direct debits, the first milestone has been missed due to delay in the implementation of enabling legislation, the Payment Services Directive (PSD), in the European Parliament. Direct debits will not be available until 2009. This will put severe pressure on the second milestone.
The European Commission has established the legal foundation through the Payments Services Directive (PSD). The commercial and technical frameworks for payment instruments are being developed by the European Payments Council (EPC), made up of European banks, and are mostly finalised as of July 2007. The EPC is committed to delivering three pan-European payment instruments:
To provide end-to-end straight through processing (STP) for SEPA-Clearing the EPC committed to delivering Technical Validation Subsets of ISO 20022. Whereas bank-to-bank messages (pacs) are mandatory for use, customer-to-bank message types (pain) are not; they are strongly recommended however. Because there was tolerance left for interpretation, it is expected that several pain-specifications will be published across SEPA-countries.
The Euro Banking Association (EBA) has introduced a Pan-European Automated Clearing House (PE-ACH), via its EBA CLEARING subsidiary. It provides a clearing and settlement mechanism needed for banks to exchange SEPA credit transfers and direct debits. Both services were implemented in time for the launch of SEPA in January 2008. Other organisations, such as existing national payment processors, have also announced their intentions to clear and settle SEPA payment instruments.
Businesses, merchants, consumers and governments are also interested in the development of SEPA; the European Associations of Corporate Treasurers (EACT), TWIST, the European Central Bank, the European Commission, the European Payments Council, the European Automated Clearing House Association (EACHA), payments processors and pan-European banking associations (European Banking Federation, EBF; European Association of Co-operative Banks, EACB; European Savings Banks Group, ESBG) are playing an active role in defining the services which SEPA will deliver.
SEPA impacts all banks operating in 31 countries — the 27 EU member states, the three other European Economic Area countries (Liechtenstein, Iceland and Norway) and Switzerland. Since January 2008, banks are migrating customers over to the new payment instruments. By 2010, the majority should be on the SEPA framework. As a result, banks throughout the SEPA area (not just the Eurozone) will need to invest heavily in technology with the capacity to support SEPA payment instruments.
It should be noted that of the European microstates, the Vatican City, San Marino and Monaco will all be part of SEPA, whereas Andorra will not, despite its de facto adoption of the euro as its currency.
The introduction of SEPA will increase the intensity of competition among banks and corporates for customers across borders within Europe. It also provides a business opportunity for a range of other organisations, including payment processors such as VocaLink and Equens and SIA-SSB, to help banks reduce costs and develop new payment services.
Multi-national businesses and banks have the opportunity to consolidate their payments processing onto common platforms across the Eurozone. They will benefit from substantial efficiencies by choosing among competing suppliers offering a range of solutions and operating across borders.
For consumers and organizations, SEPA could mean cheaper, more efficient and faster payments transfer when moving Euro from one Eurozone country to another.
|1957||Treaty of Rome creates a European Community|
|1992||Maastricht Treaty creates the euro|
|1999||Introduction of the euro as an electronic currency, including introduction of the RTGS system TARGET for large-value transfers|
|2000||Lisbon Agenda. The meeting creates a European Financial Services Action Plan|
|2001||EC Regulation 2560/2001 harmonises fees for cross-border and domestic euro transactions|
|2002||Introduction of euro banknotes and coins|
|2003||First pan-European ACH (PE-ACH) goes live. EC Regulation 2560/2001 comes into force for euro transactions up to €12,500|
|2006||EC Regulation 2560 cap increases euro transactions up to €50,000|
|2008||SEPA pan-European payment instruments become operational in parallel to domestic instruments on 28 January.|
|2009||PSD - Payment Services Directive (PSD) to be implemented in national laws by November|
|2010||SEPA payments will become the dominant form of electronic payments|
|2011||SEPA payments will replace all national payments in the eurozone|