Version 5.

0 - February 2014

for
CONSUMERS

Information on the
SINGLE EURO PAYMENTS AREA
All you need to know about SEPA

EPC Shortcut Series*

Shortcut to SEPA
Shortcut to the SEPA Direct Debit Schemes
Shortcut to the SEPA Credit Transfer Scheme
Shortcut to the SEPA Data Formats
Business – the 10 best Reasons to practice SEPA
Public Sector – the 10 best Reasons to practice SEPA
Merchants - the 10 best Reasons to practice SEPA

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 TABLE OF
CONTENTS

1. SEPA FOR CONSUMERS – IN A NUTSHELL 4

1.1 What is SEPA? 4
1.2 Why SEPA? 4
1.3 Who makes SEPA happen? 5
1.4 How does SEPA benefit consumers? 5
1.5 SEPA made easy! 5
2. MAKING SEPA PAYMENTS 6
2.1 SEPA Credit Transfer 7
2.2 SEPA Direct Debit 8
2.3 SEPA for Cards 9
3. THE SEPA ACCOUNT IDENTIFIERS: IBAN AND BIC 10

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 SEPA FOR CONSUMERS – IN A NUTSHELL

1.

1.1 What is SEPA?

The Single Euro Payments Area (SEPA) is a The European banking industry has delivered a set of
European Union (EU) integration initiative in the harmonised SEPA payment instruments for credit transfers,
area of payments. direct debits and card payments. These same SEPA payment
instruments can be used to pay for goods and services
SEPA payments are always euro payments. you purchase throughout SEPA. Eventually, SEPA payment
The accounts of the consumer making a SEPA instruments will replace the national payment instruments
payment and of the biller receiving this payment existing today in euro countries.
must be located in SEPA. The accounts may
be in euro or in another currency.

European Union Regulation defines

mandatory deadlines for migration to SEPA
1.2 Why SEPA? In February 2012, the European legislator adopted the
‘Regulation (EU) No 260/2012 establishing technical and business
requirements for credit transfers and direct debits in euro and
SEPA is the logical next step following the amending Regulation (EC) No 924/2009’ (the SEPA Regulation),
introduction of euro notes and coins in 2002: which defines 1 February 2014 as the deadline in the euro area
SEPA payment instruments allow consumers to for compliance with the core provisions of this Regulation. In non
exchange electronic euro payments between euro countries, the deadline will be 31 October 2016. Effectively,
any accounts in the SEPA area as conveniently this means that as of these dates, existing national euro credit
as this is possible within national borders today. transfer and direct debit schemes will be replaced by SEPA
Credit Transfer (SCT) and SEPA Direct Debit (SDD).The majority
of market participants recognise the value of setting a deadline
for migration to harmonised SEPA payment schemes through
European Union Regulation.

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 1.3 Who makes
SEPA happen?
We all do! Public authorities including
the European Commission, the
European Parliament, the European
Central Bank and EU governments create
the conditions that support the transition of
bank customers to the new SEPA payment
instruments.

The banking industry, cooperating in the

European Payments Council (EPC)1, delivers
the new SEPA payment instruments.

1.5 SEPA made easy!

SEPA does not re-invent the wheel: when

paying by SEPA Credit Transfer, for example,
1.4 How does SEPA consumers basically follow the same steps as
benefit consumers? when making such a payment using a national
credit transfer system.
Consumers can rely on one bank account
and one payment card to make euro payments The only difference between a “traditional”
throughout SEPA while enjoying highly credit transfer and a SEPA Credit Transfer
competitive services provided by banks. In is this: to do the latter, one has to name the
addition, SEPA drives forward technological IBAN (International Bank Account Number)
innovation in payments empowering consumers and, where necessary, the BIC (Bank Identifier
to take advantage of many new features. As a Code) of the party receiving the payment. Going
result, the process of paying bills will be even forward, your business partners will feature
more convenient. their IBAN and BIC prominently on websites,
stationary and invoices.

At the same time, your bank will ensure that

you can easily find the IBAN and BIC of your
own account. You will have to submit this
information when authorising a service provider
to collect payments from your account by SEPA
Direct Debit.

With regard to card payments, consumers

will continue to use their bank cards in the
exact same way as they do today while simply
enjoying the fact that their card will be accepted
by merchants across all SEPA countries.

Consumers enjoy fast, secure and streamlined SEPA

services featuring the most innovative options available in
payments.

1
The EPC is the banking industry’s decision-making and coordination body in relation to payments. For more information
visit www.epc-cep.eu.
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 MAKING SEPA PAYMENTS

2.

The introduction of SEPA makes paying bills significantly easier for mobile European citizens
including workers, students, holiday home owners, tourists or retirees living abroad. At the same
time, SEPA benefits consumers who wish to purchase goods or services from retailers located in
countries other than their home country. All consumers will be able to rely on one home account
and one payment card for all – domestic and cross-border – payments throughout SEPA.

SEPA payments can be made to or from any accounts that are held with a bank located in
SEPA. It is not necessary that the payer and / or the recipient of the payment have an account in
a SEPA country that has already adopted the euro as its national currency.

For example: a consumer who holds an account in euro with a bank in Belgium can make a
SEPA payment to a retailer who holds an account in Zloty with a bank in Poland. In such a case,
the SEPA payment takes place like this: (1) the euro amount of the payment is debited to the
Belgian consumer’s account; (2) the exchange of funds between the Belgian bank and the Polish
bank takes place in euro; and (3) the amount of the payment is converted from euro to Zloty when
crediting the Polish retailer’s account.

SEPA payments can be made by credit transfer, direct debit or using a bank card.

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2.1 SEPA Credit Transfer

SEPA Credit Transfer services allow customers to transfer

euro amounts to any beneficiary account in SEPA.

When using the SEPA Credit Transfer, there To make a SEPA Credit Transfer payment,
will be no deductions to the original amount one has to name the IBAN (International Bank
transferred. Account Number) and, where necessary, the
BIC (Bank Identifier Code) of the beneficiary
Each party to the transaction, e.g. the receiving the payment. Further information on
consumer paying a bill on the one hand and IBAN and BIC is featured on page 10 of this
the biller receiving the payment on the other, publication.
will be charged individually and separately by
their bank for this payment service in a fully
transparent manner. The basis and level of
charges to customers are entirely a matter for
individual banks.

Banks offer easy-to-use tools to make

SEPA Credit Transfer payments online or
provide convenient paper-based forms at local
branches to initiate the payment.

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2.2 SEPA Direct Debit

The SEPA Direct Debit – for the first time ever – enables
consumers to make cross-border direct debit payments
throughout SEPA.

The SEPA Direct Debit provides a convenient Using the SEPA Direct Debit includes the
and secure means of paying bills and allows possibility to issue a mandate through an
for easy reconciliation of debits on account electronic channel. This so-called e-mandate
statements. option brings further advantages to consumers
as it avoids the inconvenience of printing,
Consumers enjoy a fast and simple refund signing and mailing a paper form to the biller.
procedure when making payments by SEPA The e-mandate facility is based on secure,
Direct Debit. Refunds may be claimed within widely used online banking services. Availability
eight weeks of the debit date for authorised of the e-mandate will depend upon individual
transactions and within 13 months for bank service offerings.
unauthorised transactions.
When choosing to pay bills by SEPA Direct
Each party to the transaction, e.g. the Debit, consumers will have to indicate to the
consumer paying a bill on the one hand and biller the IBAN (International Bank Account
the biller collecting the payment on the other, Number) and, where necessary, the BIC (Bank
will be charged individually and separately by Identifier Code) of their account that is to be
their bank for this payment service in a fully debited. Further information on IBAN and BIC
transparent manner. The basis and level of is featured on page 10 of this publication.
charges to customers are entirely a matter for
individual banks.

A consumer completes a SEPA mandate to

authorise a biller (a retailer selling goods or tax
authorities, for example) to collect payments
via SEPA Direct Debit. At the same time, the
SEPA mandate authorises the consumer’s bank
to pay these collections.

A biller may offer payment by SEPA Direct

Debit in instances where a consumer and a
biller have an existing agreement on direct debit
collections. For example, you are subscribing
to a newspaper today paying by direct debit.
Your biller will clarify whether the mandate
you originally issued continues to be valid or
whether you have to issue a new mandate.

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 2.3 SEPA for Cards

SEPA for Cards makes it even easier for consumers to rely on

a single card for paying bills and withdrawing cash.

Consumers can use their payment card

throughout SEPA in the same way they use it
in their home country.

In line with best practices the SEPA cards

market recognises the EMV standard as the
technology that allows payments with cards at
very high levels of security. EMV is an industry
standard to implement CHIP and PIN security
for card transactions.

Consumers receive full details of any

merchant currency conversion charges across
SEPA.

A so-called SEPA-compliant bank card must

have the potential to be effectively accepted
at ATMs and/or by merchants throughout
SEPA. However, it is important to note that it
is the decision of the individual merchant – a
supermarket, for example – what kind of bank
cards to accept for payments or not. In very
limited instances, therefore, it might happen
that a bank card cannot be used to pay at the
check-out of an individual retailer located in
SEPA.

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 THE SEPA ACCOUNT IDENTIFIERS: IBAN AND BIC

3.

When making a payment by credit transfer or direct debit today, consumers indicate an account
number and a bank code that allow specifying bank accounts on national level.

SEPA, however, enables bank customers to exchange euro payments between any accounts
in SEPA. This is only possible when banks and bank customers agree to use account identifiers
which allow pinpointing an account regardless whether the payment is exchanged between two
parties located in the same country or in different countries. In SEPA, therefore, IBAN (International
Bank Account Number) and BIC (Bank Identifier Code) are the only permissible account and
bank identifiers.

IBAN and BIC are features that were developed by ISO, the International Organisation for
Standardisation. ISO is the world’s developer of globally compatible standards that enable service
providers (such as banks) to offer internationally compatible solutions (such as SEPA payment
instruments).

Details on the use of IBAN and BIC are set out in the
‘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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 In most countries, a national website devoted
to SEPA is available which contains a range of
IBAN and BIC related items, including
educational material facilitating the use of these
account and bank identifiers. Links to national
SEPA websites can be found on the website of
the EPC at www.epc-cep.eu.

Billers including businesses and public

administrations will feature their IBAN and
BIC prominently on websites, invoices and
stationary.

Consumers find IBAN and BIC pertaining to

their own account on their account statements
and / or imprinted on their bank card.

In addition, banks provide easy-to-

understand instructions on the use of IBAN and
BIC on Internet home banking channels and by
making available print flyers, for example.

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EUROPEAN PAYMENTS COUNCIL (AISBL)
Cours Saint-Michel 30A
B-1040 Brussels
Phone: + 32 2 733 35 33
Fax: + 32 2 736 49 88
E-mail: secretariat@epc-cep.eu
www.epc-cep.eu

SEPA for Consumers. EPC document reference: EPC153-09 version 5.0

© 2014 Copyright European Payments Council (EPC) AISBL

Reproduction for non-commercial purposes is authorised; with acknowledgement of the source.
© 2012 Design by arnaudbeelen.be / Brussels
© 2012 Illustrations by Jean-Claude Salemi

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