Banks and their corporate customers are about to enter an era of profound global business change.
In January 2008, foundations were laid for a Single Euro Payments Area (SEPA) – a process that aims to deliver harmony in all financial transactions across Europe, and create the conditions for much greater standardization in the movement of money across the world. With this note, lets take a insight view of SEPA.
“The Single Euro Payments Area (SEPA) will be the area where citizens, companies and other economic actors will be able to make and receive payments in Euros, within Europe, whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location.”
What is all the fuss about SEPA?
As its well known, Europe has had a common currency and monetary policy since the Euro was introduced in 1999 and Since 1 January 2002, consumers have been making cash Euro payments everywhere in the Eurozone.However, non-cash payments between countries – mainly credit transfers, and credit and debit cards have been expensive and complicated to transact, and a barrier to European monetary integration. There is currently no robust mechanism for a direct debit
between countries.
Therefore, The Single Euro Payments Area (SEPA) project is designed to eliminate national differences in payment instruments and processing infrastructures in Europe,and harmonies fees for cross-border and domestic Euro transactions.
SEPA Journey

It all started in the year 2002 as an initiative to transform European banking Infrastructure by creation of a European Payments Council (EPC). The purpose of such initiative was to define new rules and frameworks and simplify cross border complex payments process across Europe. This project aimed at achieving harmony between national and international payments in non-cash mode. European banking industry used to face severe losses in the process of cross border transactions. This led the banks to create the EPC.
SEPA aims at providing a common platform for all the associated members to make and receive payments in a single currency (i.e. euro) within Europe irrespective of their base location. SEPA project involves key members like European Commission (EC) and European Central Bank (ECB) supported by the European Payment Council (EPC).
About European Payments Council (EPC)
It is a European governing body, which consists of more than 50 banking institutions formed to standardize the payments mechanisms in Europe. It is the decision-making and coordinating body, which is responsible for issues related to payment systems in the European Banking industry.
Mission SEPA
- It aims to provide a single area for all payments across Europe.
- Single Account, single card mechanisms irrespective of country
SEPA Project
As per website note, SEPA implementation schedule was split into three (overlapping) phases from a banking perspective:
- Design Phase (January 2004 -June 2006)
- Establishment of the rules, practices and standards for new payment instruments.
- Implementation Phase (June 2006 –November 2009)
- The banks design and test new product offerings under SEPA
- Participating countries have to set up national implementation and migration bodies to ensure smooth roll out of the SEPA infrastructure
- Launched in January 2008:
- SCT (SEPA Credit Transfer)
- SCF (SEPA Cards Framework)
- Scheduled for launch at end of 2009:
- SDD (SEPA Direct Debit).
- Migration Phase (January 2008 – December 2010)
- The cross-over period between the old and new instruments, ensuring a gradual market-driven migration to SEPA
- This phase includes set-up of PEACHs (Pan-European Automated Clearing House).
Therefore this third phase is more meaningful to corporate who are running there accounting system in ERP and they must be make sure they should not impacted by product limitation and avoid penalties as there is Europe wide mandatory requirement for non-compliance. These penalties would be leveled for each individual payment, which would be substantial across 16 countries.
SEPA Consist of:
- The single currency
- A single set of euro payment instruments – credit transfers, direct debits and card payments
- Efficient processing infrastructures for euro payments
- Common technical standards & business practices
- A harmonized legal basis
- Ongoing development of new customer-oriented services
SEPA coverage area
As SEPA will be introduced on a phased basis. Thirty-one countries are currently committed to SEPA: the 27 EU member states, the three other European Economic Area countries (Norway, Iceland and Liechtenstein) and Switzerland.[source Website]
Currently only 16 counties under coverage area.
- Austria
- Belgium
- Germany
- Spain
- Finland
- France
- Greece
- Ireland
- Italy
- Luxembourg
- Netherlands
- Poland
- Portugal
- Sweden
- Slovenia
- United Kingdom
What are the different payment Instrument that cover in SEPA
There are four types of payment Instrument
- SEPA Credit Transfer
- SEPA Direct Debit
- SEPA Card
- SEPA Cash
Standardization -Addressing the SEPA schemes Requirements
The SEPA payment platform supports different schemes for both credit transfers and direct debits.
New schemes have been developed for credit transfers and direct debits that describe the technical and functional protocol for exchanging credit transfers and direct debits between two banks using formats and procedures. The formats are based on the ISO 20022 XML standard developed by SWIFT.
SEPA requires common information (‘data elements’) for SCTs and SDDs, outlined in the SEPA Credit Transfer Rulebook and SEPA Direct Debit Scheme Rulebook respectively.

SEPA within ERP
SEPA will make it possible for ERP systems to be better integrated and to communicate better with the bank.
SEPA@Oracle
SEPA support is required in Oracle in these products;
- EBS 11.5.10, 12, 12+
- Fusion
Out of these EBS support started a few days back, which will be discussed in other post.
Possible changes with SEPA
- Euro BankAccounts :
- Cash Management Structures
- Banking Interfaces
Further References