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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. There are three possibilities for cross-border card use:

  • Replacement of domestic card schemes by international ones;
  • Cooperation between domestic and international card schemes for cross-border card usage (known as co-badging).
  • Extension of domestic card schemes´ business operations through self- expansion or the formation of alliances with other domestic card schemes.

The aim with SEPA is to dispense with the predominantly domestic orientation of card payment systems and to ensure interoperability and broad standardisation at all levels of a card payment, ie at the interfaces

  • card holder and terminal;
  • card and terminal;
  • terminal and acquirer1;
  • acquirer1 and card issuer2.

In December 2008, the European Payments Council adopted the SEPA Cards Standardisation Volume, providing a comprehensive framework for the standardisation of card payments. Concrete functional and technical specifications are now being developed by market participants. Furthermore, the framework calls for the definition of a common set of security requirements and certification procedures for cards and terminals, which are currently being developed by card systems operators and the banking industry. In adopting the framework, the banking industry endorses the standard use of both the EMV chip and PIN and the principle of separating the cards schemes’ management from their operations.

The Eurosystem and the European Payments Council are using indicators to measure the progress of migration to EMV on a regular basis.

A further push towards the integration of the European payments market is expected in the Green Paper "Towards an integrated European market for card, internet and mobile payments” published by the European Commission in spring 2012. Consultation replies are published since June 2012.

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1The acquirer is the company that concludes the necessary contracts for collecting and settling card debts along with the companies and traders, which accept the card as a means of payment.
2The Issuer is the company that issues the cards to its customers (also known as card-issuing institution).