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Interview with Javier Santamaría, part one: ‘SEPA is kicking in and it is working’

Javier Santamaría is the chairman of the European Payments Council (EPC), which supports and promotes the creation of the Single Euro Payments Area (SEPA). As requested by the EU authorities, the EPC developed, in close dialogue with the customer community, the SEPA Credit Transfer (SCT) and SEPA Direct Debit Schemes (SDD), which help to realize the integrated Euro payments market.

It is a great honour for us that we were able to interview Javier Santamaría on this topic. In the first of two blog posts, Javier Santamaría will explain the current status of the migration and what EPC’s role is to ensure a smooth transition.

According to you, where are we in the transition process towards a Single European Payments Area (SEPA)?

Javier Santamaría: “February 1, 2014 is the deadline to comply with the core provisions of the SEPA Regulation[1]. Effectively, this means that as of this day, existing national Euro credit transfer and direct debit schemes will be replaced by SCT and SDD.

European financial institutions are ready for SEPA:

– The EPC launched the SCT Scheme in January 2008. As of September 2012, 4,575 payment service providers in 32 countries offer SCT services. Today, the payment service providers delivering SCT services represent more than 95 per cent of payment volumes in Europe.

– The EPC launched the SDD Core Scheme and the SDD Business to Business (B2B) Scheme on November 2, 2009. As of September 2012, 3,920 payment service providers, representing more than 80 per cent of SEPA payment volumes, have signed up to the SDD Core Scheme. Of those, 3,437 payment service providers also adhere to the SDD B2B Scheme. Since November 1, 2010, all payment service providers in the Euro area reachable for national direct debits must be reachable for cross-border direct debits; e.g. the SDD Core Scheme, as mandated by the European Union (EU) Regulation (EC) No 924/2009 (Article 8).

In some SEPA countries, migration to SCT has already been completed. Finland, for example, concluded migration to the SCT Scheme and the ISO 20022 message standards at the end of 2011.

On a general note: It has been clear for more than a decade that the EU authorities expect national legacy Euro credit transfer and direct debit schemes to be replaced by harmonised SEPA payment schemes. The legislative process leading to the adoption of a SEPA Regulation at EU level, which effectively establishes mandatory migration deadlines, started in December 2010. The February 1, 2014 deadline in the Euro area agreed by the EU legislator in December 2011 and formally published in the Official Journal of the EU in March 2012 therefore was hardly a surprise to anyone.

Of course, there are challenges implementing the SEPA Schemes and its technical standards. However, these challenges are comparable to the challenges inherent to the implementation of any other major change programmes. The market – both on the demand and supply side – has ample experience in managing such projects. SEPA is kicking in and it is working. There is no reason to speculate that the market is not going to meet the February 1, 2014 deadline.

The experience of SEPA project managers representing payment service users such as corporates (companies), public administrations and government agencies, who have shared their experiences and lessons learnt in the EPC Newsletter, demonstrates that implementation of SCT and SDD are equally feasible and manageable.

SEPA practitioners among bank customers clarify that implementation of one SEPA Scheme is not more complex than the other, but each requires specific steps. As the experience of early movers on the demand side handling major payment volumes indicates, migration to SEPA Schemes and technical standards is beneficial, but requires careful planning. The relevant actions and resources required to ensure compliance with the core provisions of the SEPA Regulation by February 1, 2014 in the Euro area should therefore be identified as soon as possible.”

What does the EPC do to contribute to a smooth transition and what has already been accomplished?

Javier Santamaría: “As requested by the EU authorities driving the SEPA progress, the EPC has developed, in close dialogue with the customer community, the harmonised SEPA payment schemes, which help to realise the integrated Euro payments market. The schemes are set out in the SCT and SDD Rulebooks and related implementation guidelines. These technical documents are freely available for download on the EPC Website. The EPC also ensures that all SEPA stakeholders are aware of how to actively engage in the annual scheme change management cycle.

In this context it should however be noted that with adoption of the SEPA Regulation, the EU legislator empowered the European Commission to determine the technical requirements applicable to the SEPA Schemes. The EPC will therefore be under the legal obligation to align the SCT and SDD Schemes with the technical requirements set out in the Annex to the SEPA Regulation as amended by the European Commission through so-called delegated acts.

Using a broad range of communication tools, including the EPC Newsletter and the EPC social media platforms, the EPC has reached out to all SEPA stakeholders to raise awareness on the SEPA objectives, inform on applicable legal obligations established by the EU legislator and educate on the SEPA payment schemes. The EPC offers numerous resources supporting the markets transition to SCT and SDD, including the new EPC video titled ‘SEPA for Billers. The Time to Act is Now’. This video is available with subtitles in all EU languages. These resources can also be downloaded for free from the EPC Website. Individual payment service providers are supporting their customers throughout the migration phase.

It has to be reiterated however that the EPC is not responsible for the overall management of the SEPA process. Implementation is primarily coordinated at national level by national SEPA coordination committees. The ECB makes country-specific SEPA information, including national SEPA migration plans and SEPA-related contact links, available on the ECB Website.”

Do you believe that an international online platform like the Equens SEPA blog can help to exchange best practices and increase a sense of urgency?

“Absolutely. The EPC very much welcomes the communication efforts by many stakeholders aimed at raising awareness and sharing best practice with regard to SEPA migration. The more, the merrier!”

In a second article, Javier Santamaría will discuss the main advantages of SEPA to consumers and companies, and the importance of communicating the SEPA objectives.

About the EPC

The EPC is the coordination and decision-making body of the European banking industry in relation to payments. The purpose of the EPC is to support and promote SEPA.

Following the introduction of the Euro notes and coins in 2002; EU governments, the European Commission and the European Central Bank (ECB) called on the banking industry to develop harmonised schemes for electronic Euro payments. The EPC is responsible, among other things, for the development and maintenance of SEPA payment schemes as defined in the SCT and SDD Rulebooks in close dialogue with the customer community. The rulebooks contain sets of rules and standards for the execution of SEPA payment transactions that have to be followed by adhering payment service providers. These rulebooks can be regarded as instruction manuals, which provide a common understanding on how to move funds from account A to account B within SEPA. The schemes are based on technical standards defined by standards bodies such as the International Organization for Standardization (ISO). The SEPA payment schemes developed by the EPC have open access criteria in line with Article 28 of the EU Payment Services Directive (Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market).

The EPC consists of 74 members representing banks, banking communities and payment institutions. More than 360 professionals from 32 countries are directly engaged in the EPC’s work programme, representing organisations of all sizes and sectors of the European banking industry. The ECB acts as an observer in all EPC working and support groups and in the EPC Plenary (the Plenary is the decision-making body of the EPC, see chart below). The EPC is a not-for-profit organisation, which makes all of its deliverables, including the SEPA Scheme Rulebooks and adjacent documentation, available to download free of charge on the EPC Website. The EPC does not supply technology, goods or services.

The particular payment products and services – based on a particular payment scheme – offered to the customer are developed by individual payment service providers operating in a competitive environment. The development of payment products based on the SEPA payment schemes including all product-related features is outside the scope of the EPC.


[1] Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in Euro and amending Regulation (EC) No 924/2009.

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