User:MenschMitHut/Portal/SEPA

The Single Euro Payments Area (SEPA) is the payments integration initiative of the European Union for simplification and hormonization of bank transfers. SEPA consists of the 27 EU Member States plus Iceland, Norway, Liechtenstein, Switzerland and Monaco.

Goals
The project's aim is to improve the efficiency of cross border payments and turn the fragmented national markets for Euro payments into a single domestic one: SEPA will enable customers to make cashless Euro payments to anyone located anywhere in the area using a single bank account and a single set of payment instruments.

The project includes the development of common financial instruments, standards, procedures, and infrastructure to enable economies of scale. This should in turn reduce the overall cost to the European economy of moving capital around the region (estimated today as 2%–3% of total GDP).

Overview
There are two major milestones for the establishment of SEPA:


 * Pan-European payment instruments for credit transfers started 28 January 2008. Direct debits and debit cards will be available later (before 2011).
 * At the end of 2010, all present national payment infrastructures and payment processors should be in full competition to increase efficiency through consolidation and economies of scale.

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 became available in November 2009. This has 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:


 * For credit transfers: SCT – SEPA Credit Transfer
 * For direct debits: SDD – SEPA Direct Debit. Banks started to offer this service from 2 November 2009.
 * For cards: SEPA Cards Framework

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.

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.

Since January 2008, banks are migrating customers over to the new payment instruments. Since 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.

The SEPA clearing is based on the IBAN bank account identification and the SWIFT-BIC bank identifier. Domestic transactions are migrated to the IBAN - earlier national designation schemes will be abolished by February 2014 providing a uniform access to the new payment instruments. No later than February 2016 the consumers may drop the BIC sorting information for SEPA transactions as it will be derived from the IBAN for all banks throughout the SEPA area.

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.

The introduction of SEPA will increase the intensity of competition among banks and corporates for customers across borders within Europe. For consumers and organizations, SEPA could mean cheaper, more efficient and faster payments transfer when moving Euro from one Eurozone country to another.

Territorial coverage
SEPA consists of 32 countries : Usually, all parts of the countries are part of SEPA regardless of whether the country parts are part of the European Union or not. The following countries have dependent territories which are not part of SEPA: A few countries and areas using the euro are not included:
 * All 27 European Union member states, including the 10 states which are not in the eurozone
 * The four European Free Trade Association member states
 * Monaco
 * Cyprus: Only areas controlled by the Republic of Cyprus are included. Other areas claimed by the Republic of Cyprus are exempted from EU law.
 * France: Everything apart from French Polynesia, New Caledonia, Wallis and Futuna and French Southern and Antarctic Lands is included.
 * The Netherlands: Only the European parts are included, while the Caribbean islands are excluded.
 * The United Kingdom: Additionally Gibraltar, Channel Islands and Isle of Man (which use UK sort codes).
 * Andorra, Kosovo, Montenegro, San Marino, the Sovereign Base Areas and the Vatican City State.

Misconceptions
There is a common misconception that all credit transfers in the SEPA are free to the consumer, either by scheme rules or national transposition of the Payments Services Directives. There is another common misconception that the European Parliament mandated that a bank must charge the same amount for SEPA credit transfers (which may be cross border) as they charge for domestic credit transfers in euros. However, the European Parliament merely mandated that a bank charge the same amount for international euro transfers within the European Economic Area as they charge for domestic credit transfers in euros. The European Economic Area is different from the SEPA area (the most significant difference being the inclusion of Switzerland in the latter but not in the former). Furthermore, the rule of the same price applies even if the transaction is sent as a regular international transaction instead of being sent as an SEPA transaction (common before 2008 or if any involved bank doesn't yet support SEPA transactions). Banks and payment institutions still have the option of charging a credit transfer fee of their choice, as long as it is charged uniformly to all EEA participants, banks or payment institutions, domestic or foreign. This is specifically relevant for countries that do not use the euro, as domestic transfers in euro by consumers are uncommon there, so inflated fees might be charged.

Main objectives
The main objectives of SEPA are:
 * Standardization of euro payments: equal time limits, equal fraud-risk levels, equal processes, all-electronic straight through processing, no differences between national and international payments in the SEPA area; strengthening trust and reliability on a pan-European basis.
 * Competition in respect to higher number of competitors, fewer niches or special fields or incompatibilities through standardization.
 * Reduction of costs of electronic money and of payment transactions through competition at the side of payment providers and banks – both are considered as the biggest losers of the SEPA standardization process at an estimated € 40,000,000,000 per year).
 * Reduction of cash money and increase of electronic money through reduction of costs of electronic money.
 * Increasing surveillance of (electronic) money flow particularly regarding money laundering (unofficially also for surveillance of illicit work [10–30% of GDP's], organized crime and taxes).

Progress Report
Official progress report in published here http://www.ecb.europa.eu/paym/sepa/about/indicators/html/index.en.html In November 2008, the European Central Bank published its 6th progress report on SEPA (see links below)

In barely disguised diplomatic language, the ECB expressed frustration at the lack of clarity on many aspects of the SEPA, and implored the banks, regulators, and the software industry to get on with the job. It has set out ten questions for which it wants answers, and has set out a timetable for those answers. The questions mainly require clear and unambiguous decisions at European level, but given the multi-national nature of SEPA, the collective answer requires national commitment in each country.

The main ECB criticism is of the SEPA governance process, which is poorly resourced, lacking in clarity, and failing to involve a sufficiently wide range of interested parties.

The European Central Bank regards SEPA as an essential element to advance the usability and maturity of the Euro currency. SEPA went live in Jan 2008, but as of late 2010, only 13.9% of credit transfers within Europe are executed according to SEPA standards.

The main points presented in the 39-page report are:


 * 1) Banks must create greater awareness of SEPA, and must offer better products, based upon the SEPA infrastructure. Government should accelerate programs to adopt SEPA as the standard for its disbursements.
 * 2) The banking industry must commit to work together to remove obstacles which might compromise the 1 Nov 2009 launch date of the SEPA Direct Debit. Debates on the launch date, the validity of existing DD mandates, and interchange fees must be closed out rapidly.
 * 3) Bank systems need to be improved to enable end-to-end straight-through-processing, originated by files submitted or by e-payment, e-invoicing, and m-payments.
 * 4) The ECB wants to see a target end date for migration to SEPA products, and for exiting out of older credit transfer and direct debit.
 * 5) The SEPA card framework in its current form has not yet delivered the reforms which the ECB wants.  In particular, ECB wants to see a European card scheme emerging.
 * 6) The ECB perceives a lack of consistency in card standards.  It wants to ensure that a clear set of standards are adopted and promoted throughout the industry.
 * 7) A common, high level of security for Internet banking, card payments and online payments is needed.
 * 8) Clearing and settlement organisations in many countries have made good progress on SEPA, and several are upgrading from national to pan-European.
 * 9) The banking industry, and its representative body, the EPC have not sufficiently involved other stakeholders.  Furthermore, the EPC itself does not have sufficient resources or support to enable it to complete its task.

In this situation, the ECB has set out 10 issues which it wants to see resolved, and has set deadlines by which it wants to see clear responses.


 * Deadline end-March 2009
 * How will the legal continuity of Direct Debit mandates be ensured?
 * In the longer term, what is the proposal for the methodology of the multilateral interbank arrangement for national and crossborder SEPA Direct Debits? (In simpler terms, where two banks are involved in a SDD transaction, what fee will be payable by one bank to the other?)
 * Deadline end-June 2009
 * A review and revision of Regulation 2560/2001/EU should be agreed for implementation by November 2009 to coincide with the Payment Services Directive and the launch of the SEPA Direct Debit. Regulation 2560 limits the pricing of cross-border transactions.
 * When will today's legacy Credit Transfer systems be turned off and fully replaced by the SEPA Credit Transfer?
 * Deadline 1 – November 2009
 * Will we have a situation where all banks which currently offer Direct Debits will offer SEPA Direct Debits?
 * Will we have the Payment Services Directive transposed into national law in all of the SEPA countries? Will banks and other service providers have achieved full compliance?
 * Deadline end-December 2009
 * What is the agreed framework for future e-invoicing systems?
 * When will today's Direct Debit systems be turned off and fully replaced by the SEPA Direct Debit?
 * A clear declaration is required regarding the creation of additional European SEPA-compliant card schemes.
 * Deadline end-December 2010
 * Full-scale implementation of "SEPA for cards". Among other things, this will require an EMV chip on all cards issued in SEPA countries.