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member payments


WORLD of OPPORTUNITY


Kevin Scott outlines the challenges and opportunities of the forthcoming switch to the SEPA payments system across Europe


T


he Single Euro Payments Area (SEPA) is a European Union (EU) payments integration initiative. The SEPA vision was


set out by EU governments in the Lisbon Agenda, March 2000, which aims to make Europe more dynamic and competitive. In simple terms, SEPA is designed to enable cross-border electronic Euro payment/collections within the 32 EU countries currently participating in the scheme – the 27 EU Member States plus Iceland, Norway, Liechtenstein, Switzerland and Monaco. SEPA collections can also be made to Europe from the UK or other non-Eurozone countries, but these payments or collections would be in Euros. At present, each country in the EU has a local or legacy payment solution. In the UK this is BACS; all other countries use something similar. Using BACS means that we can make payments or collect direct debits in the UK, but not


july 2012 © cybertrek 2012


beyond our borders. It is the same for all other EU countries. However, SEPA allows companies to collect direct debits from any EU country in Euros. This change to the European payments landscape benefi ts both individuals and businesses, as it enables money to be moved more easily, quickly and effi ciently across the participating countries.


Towards a single system The concept of SEPA has been mooted for many years. However, it was with the introduction of the SEPA Credit Transfer (SCT) in January 2008 that SEPA fi nally became a reality. SEPA Direct Debit has now followed and, after a slow start, volumes of the product have begun to rise: by May 2010, around 6.5 per cent of credit transfers in Europe were SEPA- compliant, compared to 2.9 per cent a year earlier. Nevertheless, as a percentage


of Harlands Group’s total collections in the UK, SEPA collections still represent less than 0.5 per cent – this in spite of the fact that, in 2011, Harlands was the largest UK producer of SEPA Direct Debits. One of the primary hurdles to greater


uptake of SEPA has been the staggered nature of implementation, with SCT coming fi rst and an initial non-obligatory introduction; most companies using credit or debit transfers have remained with the legacy solutions. And of course, the introduction of SEPA has hardly been assisted by the fi nancial crisis, both globally and in the Eurozone over the past three years, which doesn’t appear to be getting any healthier. However, despite media interest in the potential demise of the Euro, it is inconceivable that the Eurozone will unwind, other than the likely withdrawal of Greece: SEPA is here to stay. In February 2012, the European legislator applied a ruling which


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