WHAT’S THE ISSUE?
Through the Single Euro Payments Area (SEPA) project, the EU wants to make it as easy and cheap for you to make payments in euros anywhere (where euros are accepted) as it is
in your home country. This applies to:
- bank transfers
- direct debits
- credit/debit card payments
- withdrawals from cash dispensers (ATMs).
To do this, EU countries’ individual payment systems have to be phased out and replaced
by existing EU-wide system, within 12 to 24 months. Despite significant progress, this is happening too slowly – the EU wants to speed up the process.
WHAT EXACTLY WOULD CHANGE?
The EU is to:
- set deadlines for the 2 main payment methods – bank transfers and direct debits –to
move to the SEPA scheme: 1 and 2 years respectively.
- ban the use of hidden fees between banks for direct debit transactions; currently
charged in 6 countries.
WHO WOULD BENEFIT AND HOW?
- Individuals and businesses would be able to make payments throughout the EU easily,
cheaply and reliably.
- The cost of direct debits would become clearer.
- The cost of direct debits and bank transfers could come down even more, as there would
be greater competition in the banking industry.
- The resulting innovation, alongside the cheaper cost of moving money around the EU, could
stimulate economic growth worth €300 bn in the first 6 years – if the changes are made fully
and quickly.
WHY DOES ACTION HAVE TO BE TAKEN BY THE EU?
- As of August 2010, only 9.3% of all bank transfers in the eurozone were made using the EUwide
system (source: European Central Bank). If this trend continues, the full benefits of
- SEPA would not be felt for 30 years.
- As this is an EU-wide project requiring action in multiple countries, all parties involved
recognise that swift progress depends on action at EU level.
WHEN IS THE PROPOSAL LIKELY TO COME INTO EFFECT?
- During 2011 (following debate by the EU Council and European Parliament).
Source: http://ec.europa.eu/internal_market/payments/docs/sepa/citizens_summary_en.pdf
