What is SEPA?
The Single Euro Payments Area (SEPA) is a European commission initiative. It refers to an area in which organisations and individuals can make and receive electronic payments in euros under the same basic conditions. SEPA includes the 27 member states of the European Union, Iceland, Norway, Switzerland and Monaco.
In simple terms, SEPA is an initiative that aims to bring national payments markets together as one European market. As a result, cross-border transactions in euros will function in the same way as domestic transactions.
Essentially, SEPA will act as one domestic payments market, supported by the Payments Services Directive (PSD), which provides the legal framework.
In the same way that the UK has Direct Debit and Direct Credit, SEPA will have SEPA Direct Debit (SDD) and SEPA Credit Transfer (SCT).
SDD
The European Payments Council launched the SDD and SEPA B2B Direct Debit schemes on 2nd November 2009. SDD service users can collect payments in euros from customers in SEPA that have signed a SDD mandate.
SCT
SCT went live on 28th January 2008. It allows organisations to make payments to recipients in SEPA countries. It usually takes three days to process SCTs and there is no limit on the amount that can be transferred.
How can SEPA help you?
SEPA transactions have the potential to make it easier and cheaper for organisations to collect and make payments in SEPA. SDD and SCT service users can:
- Collect Direct Debits from customers in other SEPA countries
- Make single or bulk payments to payees in SEPA
- Reduce the costs of their European transactions
- Consolidate their payments operations and banking relationships
How do you start using SCT and SDD?
First of all, learn as much about SEPA as you can and look at how your organisation would benefit from SDD and SCT.
Direct Debit Limited's SEPA Direct Debit Scheme Training course is a great way to start. The course begins with an overview of SEPA and goes into detail about the scheme rules, processes and best practices.
Once you've found out more about SEPA, speak to your bank and check that they offer SEPA services. To use SDD, you'll need to:
- Apply to your bank to use the service
- Meet the technical and financial criteria specified by your bank
- Implement the use of IBANs and BICs in your organisation
- Deploy software with a SDD interface
- Ensure your clients have accounts with banks that participate in the SDD scheme
Direct Debit Limited has developed a SEPA-compliant processing platform, PayCentre®®, that manages all your domestic and international transactions.
For more information on PayCentre®® and how Direct Debit Limited can help you collect and make cross-border payments, contact one of our payments experts here, or call us on +44 (0)20 8408 7888.
