A landmark was reached on 1 August 2014 for the Single Euro Payments Area (SEPA), when it became fully operational in Europe. Marking a significant step in the aim to achieve financial harmonisation across Europe, SEPA stands out globally as one of the largest financial integration projects. Individuals and businesses can now use a single bank account for all euro credit transfers and direct debits, with payments across Europe being made as easy as those within national borders. The key benefits to businesses include the fact that only one account will be needed for all euro payments, which should result in cost reductions.
What this means for you
The deadline for migration to SEPA was originally set for 1 February 2014 but was extended to provide an additional six-month transitional period for those affected to get ready for the changes to payment transactions.
Those collecting direct debits in eurozone countries must now be able to collect SEPA direct debits and all credit transfers must meet SEPA requirements. As of 1 August 2014, banks are no longer able to process non-compliant SEPA transactions making it imperative that individuals and businesses ensure their payment systems are compliant if they wish to transact in euro countries. It is anticipated all remaining payment services in the euro area will be migrated to SEPA by 2016.