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SEPA - The Single Euro Payments Area

Current status

The objective of the Single Euro Payments Area (SEPA) is to implement schemes and standards for euro payments in the future. For reasons of efficiency, it is not practical to have national schemes and the SEPA scheme operating in parallel over the long term. This is also consistent with the long-term aim of SEPA, namely to abolish existing national payment schemes.

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Development of SEPA (Single Euro Payments Area)

SEPA denotes a Single Euro Payments Area, in which all payments are treated as domestic transactions. Since SEPA was launched in January 2008, no distinction has been made between domestic and cross-border payments.

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German SEPA Council

In May 2011, the German Federal Ministry of Finance and the Deutsche Bundesbank created the German SEPA Council, modelled on the European SEPA Council.

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Benefits for enterprises and consumers

In future, consumers and enterprises will be able to make all of their payments in euro from one account held at a payment service provider of their choice in any European country. SEPA offers businesses the chance to reduce their costs by opting for an internally concentrated system for payments settlement which will pare down the number of banking relationships they maintain and simplify liquidity management.

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The technical standard in SEPA

SEPA payments are processed on the basis of the respective current versions of the European Payments Council documentation (Rulebooks und Implementation Guidelines).

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SEPA Credit Transfer

SEPA credit transfers have been available for processing both domestic and cross-border European payments since 28 January 2008. In order to use this procedure, a payment service provider must first sign the corresponding European Payments Council (EPC) adherence agreement and convert its systems to process SEPA payments.

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SEPA Direct Debit

On account of the differences in the legal frameworks and the various domestic direct debit procedures which exist, the EPC decided at an early stage to develop a completely new SEPA Direct Debit Scheme (SDD). However, implementation of this scheme was only possible once a common framework had been developed within the European Union.

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SEPA card payments

The SEPA Cards Framework; SCF defines the standards to be met by payment service providers, card systems and other market participants in order for card payments and cash withdrawals within the Single Euro Payments Area to be processed as quickly, safely and efficiently as they are in the home country

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SEPA legal framework

The Payment Services Directive (PSD) provides a common legal framework for euro payments within the EU. It contains both prudential requirements and civil law provisions pertaining to the various payment service providers (eg institutions, e-money institutions, payment institutions) and the payment services they provide (eg credit transfers, direct debits, card payments).

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