SEPA – Single Euro Payments Area

The services within the SEPA frame are targeted on customers executing payments in Euro. Both the sender and the receiver of the payment must keep their accounts in this single area. The currency of account is not limited, but the transaction currency must be only Euro.

Benefits

reachability of whatever account within SEPA from one inland account,
transparent charges (client is informed about all charges in linked to the particular part of the transaction),
single legal framework for payments services,
mandatory processing timeframe (three days limit for payment processing must be kept),
completely new scheme of the direct debit applicable in the whole SEPA,
unlimited acceptance of payment cards within the whole EU,
faster and simplified processing of payments,
single processing scheme applicable in the whole EU, allowing the development of additional optional services for customers,
single XML format of payment orders.

Get Acquainted

SEPA History

The SEPA project was initiated by the European Payments Council in order to create a single European payment area. This space will assure equal conditions when processing payment transactions, direct debits and card businesses for all economical subjects of the European Union, European Economic Area and Switzerland – from big corporate companies, merchants, and small enterprises to the single consumers – apart of their location within Europe.

Single Payments Area

SEPA covers the payments in the single European currency – Euro – within the single European area. It is based on the single technical standards and business experience, common infrastructure and the harmonized legal framework. SEPA offers to its users cashless payments in Euro in the same quick, safe and simple way as the cashless payments in their own country are processed. Step by step, the current national schemes will be replaced by the single SEPA scheme which allows decreasing significantly the costs on payments for the payments services providers.

Single Legal Framework

The main precondition for running of SEPA is the creation o single legal framework for the whole EU. The harmonization of rights and obligations of all payments participants will be assured by implementation of the Directive 2007/64/EC of the European Parliament and of the Council on payment services in the internal market (225 kB). This Directive has to be transposed into all EU national laws till 1st November 2009 at the latest.

For the Czech Republic, mainly the Law on Payment Services replacing the current Law on Payments is concerned. The open consultation has been performed during 2008 in order to allow to the wide public to comment the draft of the new Law. The first draft of the paragraphed version is expected to be available during 2008. The Ministry of Finance of the Czech Republic and the Czech National Bank are the owners of the application of the new legal norms.

Geographical area of SEPA

In principle, SEPA covers all EU countries (EU 27) plus Iceland, Norway, Liechtenstein and Switzerland.

SEPA instruments

cashless transfers – SEPA Credit Transfer (SCT),
direct debits and collections – SEPA Direct Debit (SDD),
payment cards – SEPA Cards Framework (SCF),
cash operations – Single Euro Cash Area Framework (SECA).

It is necessary to stress that only the transactions in the single European currency – Euro – are in scope. There is no limitation in terms of the original currency in which the sender’s or receiver’s account is held, but the currency of the transfer/collection must be only Euro.

Key timings for the SEPA instruments

Credit Transfers − SEPA Credit Transfer is operating in full now; the first transfers based on the new SEPA formats have been introduced on 28th January 2008. ČSOB joined SEPA in this first wave using the position of the indirect participant (via KBC Brussels).

Direct Debit − The introduction of SEPA Direct Debit requires the significant legal changes which have to be introduced in the whole EU till 1st November 2009 at the latest. This date is the expected launch of new “European” direct debit at the same time. The completely different processing scheme is used in the Czech Republic now and the switch to the SEPA Direct Debit also for “domestic” collections is scheduled to the period after Euro is introduced as the national currency.

Interim period − During the interim period, banks will use and offer to the clients both “new” SEPA payment instruments and the “old” national payment instruments as well. The final switch to the single scheme depends on its step-by-step introduction in different countries. The critical mass of the banks within the Eurozone is expected to convert into the SEPA formats of credit transfers till the end of 2010. In terms of the direct debits, the deadline has not been announced up to now.

Payment cards − The principles for the payment cards undergo the continuous development with the aim to complete the full harmonization of current systems till the end of 2010. The SEPA “EMV” standards (common use of all magnetic stripe, chip and PIN on each payment card) are observed by ČSOB already now. This means the ČSOB is ready for SEPA in the cards already today.

Cash operations − Like for cards, the area of cash is also developed continuously. The main goal is the full harmonization of Euro cash so that the EU citizens migrate to cards and electronic channels with considerable savings for the whole society.

Main SEPA principles

single processing conditions,
single terms for processing transfers and direct debits,
single payment instruments within the single area,
single XML formats for transfers and direct debits (the XML format is mandatory for processing of transactions on the bank-to-bank level; for the bank-to-customer and vice versa level, this is an optional service).

We ask you kindly to address your proposals or queries to your ČSOB branch. The special e-mailbox sepainfo@csob.cz is also here for your disposal. You will receive the reply as soon as possible.