SEPA Payments and EuroCommerce
The Single Euro Payments Area will work as a single domestic payments market in which citizens and economic actors will be able to make payments as easily and inexpensively as they can locally. It will effect over 470m people, over 14 card schemes, 10 clearing house schemes, 9000 banks and over 73bn transactions per year; so for anyone receiving electronic payments it is important to understand it and be ready.
By 2008 the first SEPA products will start to become available and by 2010 all banks will need to be SEPA compliant. What this means is that a consumer of a company can make an electronic transfer or use a debit or credit card anywhere in the SEPA region and be treated as if it were a local payment. So, should bank customers want to transfer money from their account in Belgium to one in Germany, they can use the same instruments as they use today, through Internet banking for example.
Implication for Cards
Citizens can use their debit card when abroad in the same manner and with the same charges as they do at home. Cash withdrawals will also be treated as an at-home transaction. Essentially the scheme is aimed at driving out much of the inefficiency in the system at present. While it is possible to use some cards abroad now in some countries there is little consistency across the region and there are also needlessly high charges as there is little competition due to infrastructural features.
Debit Card Usage Increase in Electronic Payments
For electronic payments there are a number of implications. Firstly, the scheme should see the growth of debit cards for electronic payments as they become as accepted as credit cards in all regions. A Polish person living in Ireland for example can use their Laser card to purchase a ticket from a Polish airline as the Laser scheme will be SEPA-compliant. Given the transaction costs for debit cards are considerably lower this should result in savings for electronic merchants. EuroCommerce is committed to servicing SEPA-compliant cards as soon as they are on the market.
Direct Debits
Direct debits will also work across borders. A German contract worker living in the UK can pay their UK rent from their German account, into which they can also receive their salary. This avoids the difficulty in setting up a local account in the UK and the transaction expense for the user of transferring money back to Germany at the end of the contract. EuroCommerce processes direct debit payments in-country today for dozens of organisations and will be at the forefront of implementing cross border direct debit payments as the clearing houses can handle them.
Competition Between Acquiring Banks
Due to the dominance of local schemes to date this has hampered competition between acquiring banks and as such little variance in the charges for card processing. Under SEPA, in principle, there is open competition between acquiring banks and therefore scope to offering competitive rates across the Eurozone. EuroCommerce will carefully monitor the most preferential rates and be able to work with our merchants on securing the best deal.
Useful Links: The European Payments Council
http://www.europeanpaymentscouncil.eu/index.cfm
To talk to us about how EuroCommerce can help you become SEPA compliant mail us at SEPA@eurocommerce.ie
| EuroCommerce’s SEPA Commitments |
For Merchants
For Payment Processing Partners
|
