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With the upcoming implementation of SEPA looming, we are getting a lot of queries relating to the new banking rules. Read our answers to the most popular below:
SEPA stands for the Single Euro Payments Area and is designed to simplify and streamline the national and international payments processes.
Member States of the European Union, plus Iceland, Lichtenstein, Monaco, Norway & Switzerland are all members of SEPA.
All bank accounts will be required under SEPA to have a standardised IBAN (International Bank Account Number) and BIC (Bank Identifier Code).
Your IBAN and BIC number will typically be shown on your bank statement and is also available via your online banking.
Under SEPA national and international payments will share the same banking deadlines of the end of the next business day as set out in the European Commission’s Payment Services Directive (PSD).
One of aims of SEPA is to improve customer service levels for transactions between European countries. This means merchants will be able to accept a wider range of bank cards allowing tourists and those on business to continue with their banking abroad as they would at home.
Under the new rules, it will no longer be possible for the sending bank to make deductions on transfers within SEPA. Whilst it is not typical for a bank to charge for credit transfers, they will be required to show separately this amount if they choose to do so. Any confusion regarding the amount of money sent internationally before bank charges should therefore be removed.
All businesses falling within the new SEPA scheme will be required to follow the new European regulations. Initially, this will place an administrative burden on companies using and offering payroll services, direct debit facilities and accounting services. However the simplified rules will facilitate faster cross border payments which in turn will provide an opportunity for businesses to reduce their costs and improve their cash flow.
The European Commission requires all national transactions systems to be functioning in line with SEPA by 1st February 2014. This will extend to international transactions on 1st February 2016
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