Single Euro Payments Area (SEPA)

What is SEPA?

The Single Euro Payments Area (SEPA) is an ongoing initiative of the European banking industry supported by EU governments, the European Commission and the European Central Bank (ECB).

The core objective is to create a cohesive internal market for all electronic euro payments within Europe, promoting greater transparency, uniform standards, lower costs and faster payments.

Who is in SEPA?

There are 32 countries in the SEPA zone, as follows: Austria, Belgium, Britain, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland (Republic of Ireland), Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Slovenia, Slovakia, Spain, Sweden, Switzerland.

SEPA first became a reality in 2008, with the launch of the SEPA Credit Transfer (SCT) scheme, followed by the SEPA Direct Debit (SDD) scheme in November 2009.

Latest Developments

On 14th February, 2012, the EU Parliament adopted the regulation that will enforce the closure of national electronic euro payment schemes across the 32 SEPA zone countries in favour of schemes based on SEPA standards.  The end date for implementation of the above Regulation is 1st February, 2014.

In Ireland, this will mean the traditional 6 digit National Sort Code (NSC) and 8 digit Account Number, used in our Electronic Money Transfer System (EMTS), will no longer be acceptable and will be replaced by the BIC (SWIFT Bank Identifier Code) and IBAN (International Bank Account Number) for electronic payments.

Companies who submit electronic payment files (e.g. Salary Payments, Creditor Payments) to banks will also be required to make format changes to those files.

In a similar fashion, the Irish Direct Debit system will also be impacted and originators will have to use the BIC and IBAN as the bank and account identifier for national direct debit transactions.

SEPA - What benefits can it bring to your business?

Although SEPA will present challenges, it will also offer many benefits to businesses including:

• Simplified and standardised Euro payments in Ireland and across Europe, enabling "straight through processing".
• Faster payments- standard execution cycle for SEPA Credit Transfers is one day.
• More detailed information travelling with payments that the receiving bank must deliver to the receiver of the payment leading to improved reconciliation processes.
• Less complexity in payment processing – one set of rules governing rejections and returns of euro credit transfers and direct debits across Europe.
• The potential to consolidate payment activity into one bank account bringing greater control over liquidity management and reduced administration costs.
• The ability to use the new SEPA Direct Debit scheme for collections in Ireland and across Europe eliminating the requirement for local direct debit scheme membership.

How can AIB help you?

The impact of SEPA and the timing of its adoption by your business will depend on your unique requirements and how your payments and collections operations are structured.

AIB already has fully compliant SEPA payment and collection systems in place and we can support the initiation of single and bulk payments based on SEPA standards today.

AIB has launched a comprehensive SEPA communications programme designed to help you deal with the challenges and maximise the opportunities presented by SEPA.  Regular updates will also be made available via AIB’s electronic banking channels and your local AIB branch.

Useful Links:

Information on SEPA issued by the European Commission
http://ec.europa.eu/internal_market/payments/sepa/

Information on SEPA Direct Debits from the European Payments Council
http://www.europeanpaymentscouncil.eu/content.cfm?page=sepa_direct_debit_(sdd)

SWIFT Codes can be verified on the following website
www.swift.com/biconline/

Information published by the Irish Payment Services Organisation (IPSO)
http://www.ipso.ie/section/SEPA

SEPA Payment Products

SEPA Credit Transfer

• A SEPA Credit Transfer is a non-urgent euro payment debiting a euro account and crediting another euro account in the SEPA zone
• The Bank Identifier Code (BIC) and International Bank Account Number (IBAN) must be used as the unique identifier for the receiver’s bank, branch and account
• The maximum execution timeframe for a SEPA Credit Transfer is one business day subject to cut off times
• More detailed information can be included with the payment – up to 140 characters of remittance information available and the receiving bank is obliged to make this information available to the receiver.

SEPA Direct Debit

SEPA Direct Debit allows you to collect money from domestic and cross border debtors within the SEPA zone using a set of standardised rules.

Originators of direct debits may collect euro payments from any of the SEPA countries including Ireland using a single direct debit service rather than having to use the country specific direct debit services that currently exist.

SEPA Credit and Debit Cards

The SEPA Cards Framework introduced a new standard which allows cardholders to pay and withdraw cash throughout the SEPA zone with the same ease as in their home countries.

AIB’s suite of credit and debit cards is compliant (through Maestro (Debit Cards) and Visa and MasterCard schemes (Credit Cards) since January 2008.

Important / Regulatory Notice

Terms and conditions apply.

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