Europe-wide payment project not yet in credit

BUILDING SEPA

Main SEPA projects

SEPA Credit Transfer Scheme (SCT)
The intention is that SCT will replace Europe's current patchwork of national systems for credit transfers between bank accounts. Switching over to the single system would mean significant cost savings for banks, and is also supposed to make life simpler for account-holders, who would use the same form (based on an IBAN number) for cross-border and domestic payments.

SEPA Direct Debit (SDD)
The European Payments Council (EPC) has developed a ‘core' SEPA direct debit scheme (SDD) for payments between consumers and businesses, and a scheme for ‘business to business' transactions. Both will be launched on 1 November. Seen by many as the flagship SEPA project, the schemes (in parallel with the payment services directive) will enable cross-border direct debit payments in the EU.

SEPA Cards Framework
This differs from SDD and SCT in that the banking industry decided against the creation of a new European scheme. It instead introduced a principle that no general-purpose card scheme (such as Bancontact in Belgium) should be designed exclusively for use in a single country, effectively liberalising markets for domestic debit card payments. This came into force in January 2008. The EPC is also working on common technical standards for card payments, to ensure that debit cards are fully functional throughout the SEPA area. The Eurosystem (ECB and national central banks of the eurozone) has called for the development of a European card scheme.

Other SEPA projects

E-payments
The EPC is examining whether to draw up a common e-payments scheme for the SEPA area. Such schemes allow consumers to make online payments with their debit cards, while merchants get a credit guarantee from the bank in real time. It would be an extension of the SEPA credit transfer scheme. E-payment schemes already exist in the Netherlands, Germany and Austria.

M-payments
The EPC and GSMA, an association representing the mobile communications industry, are developing common standards for payments made by mobile phones. The standards would cover payments made using phones equipped with contact-less chips. The chips can be used to authorise transactions when waved near a reader.

E-invoicing
The Commission has said that the EU could reap €238 billion of economic benefits “if SEPA can be used as a launch-pad for e-invoicing”. This involves the electronic transfer of invoicing information, for both billing and payment, between business partners.

SEPA for Cash
Six out of seven payments in the EU are still made using cash. The EPC has drawn up recommendations to improve cash processing, for example, through common security requirements for transporting euro notes.