What is SEPA? 2

When I was told about SEPA i knew very little, and like most people the first thing i did was to google it. The first thing that came up was the Scottish Environment Protection Agency, which didnt sound like it had anything to do with Europe and payments. I scrolled further down the first results page and was overwhelmed with the number of sites, mainly bank and European Commission related, that were out there. In short i didnt have alot of time, and just wanted to know the most important aspects of what SEPA is. Following is my definitive list:

What is SEPA:

  • SEPA – Single Euro Payments Area
  • European Union initiatve to harmonise euro currency payments and reciepts in Europe
  • The objective is to remove the various national local clearing systems, in the participating European countries, and create a single Euro currency clearing system
  • With SEPA, we’ll have a single Euro clearing system allowing you to have simplified and standardised credit and debit transfer processes between participating countries
  • Standardisation and simplification should make our payments and reciept processes faster, cheaper and easier across the euro zone
  • The SEPA legislation has introduced new technical standards and a common bank file format allowing corporates to make SCT and SDD across the euro zone in the same way (sort of!, but we’ll come back to this later)

Some of the acronyms you need to be aware of:

  • SCT – SEPA Credit Transfer – i.e Euro currency payments
  • SDD – SEPA Direct Debits – pretty self explanatory really
    • Just in case your wondering, direct debits? But isnt SEPA just about payments – Nope! The SEPA legislation includes direct debits. Not only that, the direct debit implementation which you may have thought was not in scope is both in scope and will be the most complicated part of your SEPA implementation. Nice, eh?

Currently, we have a mixture of schemes – the many existing national domestic payments and collection schemes plus the SEPA Credit Transfer and SEPA Direct Debit – all running alongside each other. The European Commission, with backing from the European Central Bank, European Parliament and the Council of the European Union, formally adopted the SEPA Regulation (No. 260-2012) and it came into force across all EU member states earlier this year on 31st March, 2012.

The SEPA Regulation (No 206-2012) more on this soon…amongst other things states that the SCT and SDD schemes will completely replace the existing national credit / debit schemes on 1st February, 2014. Yep, the EU have given us a deadline, and its one we cannot let slip. Oh crap!


  • National / local solutions
  • Various national payment / collection schemes, standards, laws
  • Little / difficult interoperability between euro-currency countries
  • Various national implementations
  • Various bank & country specific payment / direct debit file formats
  • Cross border euro payments complex
  • Cross border euro collections not possible

SEPA should bring about:

  • Common payment / collections solution
  • Common payment / collection scheme, standards, laws
  • Ease of interoperability
  • Common XML based payment / direct debit format
  • Harmonised implementation(s)
  • Ease cross border euro payments and will make cross border euro collections possible

I hope this has given you a quick intro into what SEPA is. I’m sure you’ll have many more questions, and all being well they will be tackled in upcoming posts. In the meantime, additional information can be found on the European Payments Council website should you need it.

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2 thoughts on “What is SEPA?

  1. Reply Joost Apr 23,2013 3:33 pm


    I admire your attempt to come to a list of Niche products. Some comments:
    – SEPA is NOT Single European Payments Area but Single EURO Payments Area. It is about the currency, the Euro. It is the Single Area for Payments in Euro.
    – A Niche product is not the same as a Waived product. A Niche product can exist as is until 1/2/16. A Waived product can exist until 1/2/16 but will be handled as a SEPA payment.
    – I wonder where you found the data about Italian Niche products, because me too, I am surpised on the number of products.

    Regards, Joost
    (SEPA Consultant for a Dutch bank)

    • Reply SEPA-for-Corporates Apr 24,2013 8:11 pm

      Hi Joost,

      Thanks for your comments, and apologies for obvious mistype!

      Regarding Italy, my list was constructed at the end of February, and based on comments/feelings in the marketplace. This has been confirmed by the BNP Paribas Italy guide which states the natinoal products are waived till Feb 2016.

      Now that all of the niche/waived products are confirmed, I will have an up to date post on the in-country specifics very shortly. Watch this space…

      Thanks again for your visit & attention.

      Best Regards – SEPA for Corporates

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