Recently I have done a project on SEPA (Single Euro Payment Area). So, I thought of sharing it with you all. Idea is not to bore you but share something interesting about SEPA, as in college days we all learnt about European Union, that EU has the highest degree of economic integration across the globe and SEPA is just the next step to strengthen this integration. Imagine all the banks of EU using single network for clearing interbank settlements….!! SEPA impacts all banks operating in 31 countries — the 27 EU member states, the three European Economic Area countries (Liechtenstein, Iceland and Norway) and Switzerland. SEPA will allow customers to make non-cash euro payments to any beneficiary located anywhere in the euro area using a single bank account and a single set of payment instruments. All retail payments in euro will thereby become “domestic”, and there will no longer be any differentiation between national and cross border payments within the euro area. The Single Euro Payments Area (SEPA) is an initiative of the European banking industry that will make all electronic payments across the euro area – e.g. by credit card, debit card, bank transfer or direct debit – as easy as domestic payments within one country are now. The proposed Payment Services Directive is intended to provide the necessary legal framework for SEPA, as well as for better payments in all EU countries. The SEPA schemes as designed by the EPC are aimed at ensuring that all scheme participants in Europe, whether they are in Belgium or in Finland, will be using the same standards and act under the same rules.The EPC has defined the new schemes, frameworks, rules and standards for euro payments. The implementation of SEPA is being undertaken by European banking communities and all other stakeholders. The European Central Bank (ECB) and the European Commission (EC) strongly support SEPA and with the EPC. The SEPA payment instruments will have a decisive advantage over any existing national payment instrument: they will be usable all over Europe and guarantee to the payer and payee full reachability in a much larger market than any national market. As such, they will constitute the “highest common numerator” compared to the variety of features available based on the presently existing instruments.
On a practical level, SEPA means that you will be able to make fast and secure transfers between bank accounts anywhere in the euro area, while if you are shopping abroad you will be able to use your bank debit card to make a payment in euro, just like at home. SEPA will also help to improve all payments, whether they are domestic payments or cross-border payments between two euro area countries. All consumers will benefit from new rules ensuring transparent pricing and prompt transfer. Banks will be able to make the first SEPA products available starting 1 January 2008, and are aiming to make SEPA a reality for everyone by the end of 2010.There are two major milestones for the establishment of SEPA:
Pan-European payment instruments for credit transfers, direct debits and debit cards, will be available from 1 January 2008, in addition to national ones
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.
Key dates-
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
2004:10 additional countries join EU
2006:EC Regulation 2560 cap increases Euro transactions up to €50,000
2008:SEPA pan-European payment instruments will become operational in parallel to domestic instruments
2010:SEPA payments will become the dominant form of electronic payments
2011:SEPA payments will replace all national payments in the eurozone
No comments:
Post a Comment