What is SEPA and what are its key objectives?
SEPA will standardise euro payments across Europe. In total, there are 32 countries in the SEPA area. These are the existing 27 EU member states of the European Union, together with Iceland, Lichtenstein, Monaco, Norway and Switzerland.
The 27 countries of the European Union are: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, Spain, Sweden and the United Kingdom.
SEPA comes into full effect on 1 February 2014, changing the way euro electronic payments are processed across Europe.
What are the main changes that SEPA brings?
- From 1 February 2014, existing national payment schemes will be closed down, following which euro electronic payments will be processed through new SEPA schemes.
- By that stage, all national direct debits and credit transfers must be SEPA-compliant. This will include everything from staff payroll to paying creditors or receiving a euro electronic payment from customers within SEPA.
- National sort codes and account numbers will be replaced by an International Bank Account Number (IBAN) and a Bank Identifier Code (BIC).