SEPA (Single European Payments Area) Explained
Get Ready for SEPA
The single Euro Payments Area (or SEPA) is an EU Initiative that will change the way euro denominated electronic payments are processed across Europe.
What is SEPA?
The single Euro Payments Area (or SEPA) is an EU Initiative that will change the way euro denominated electronic payments are processed across Europe. It means that users of payment services can make and receive payments across all participating countries using common technical standards and payment instruments. The participating countries are the 27 EU member states, together with Iceland, Liechtenstein, Monaco, Norway and Switzerland.
What are the main changes that SEPA brings?
From 1st February 2014, existing national payment schemes will be closed down, following which euro denominated electronic payments will be processed through new SEPA schemes.
National Sort Codes (NSC) and bank account numbers will be replaced by Bank Identifier Codes (BIC) and International Bank Account Numbers (IBAN) for all euro denominated electronic payments.
SEPA will allow individual consumers and businesses in Ireland to make an electronic payment to someone in any of the 32 European countries exactly the same way as they would make a payment to someone in Ireland.
There will be guaranteed next day value for payments across SEPA.
What will SEPA mean for consumers?
Prior to 1st February 2014 you may be asked to provide your BIC and IBAN when setting up new direct debits. There is no action required for existing direct debits. Once SEPA has been fully implemented, consumers will need only one bank account to make and receive payments in euro to and from anywhere in the area covered by this initiative.
What is BIC?
The BIC or Bank Identifier Code (also known as the SWIFT address) is a unique address which in payment messages identifies precisely the bank involved in financial transactions. When used in conjunction with the IBAN it identifies the bank at which the account of the beneficiary is held.
What is IBAN?
IBAN stands for International Bank Account Number. It was created as a viable and practical international bank account identifier, used internationally to uniquely identify the account of a customer at a financial institution, to assist error-free cross-border payments and to improve the potential for straight-through payment processing. EU banks are legally required to provide their customers with an IBAN for each bank account.
Summary
SEPA aims to create a single common market within Europe whereby people will be able to send and receive Euro currency payments across Europe as easily as sending it within your own country. What does this mean for members? It means that electronic cross-border payments in Euro area as easy, inexpensive and secure as “national” payments.
SEPA will allow credit union members to make and receive payments to and from their Credit Union accounts, across all participating countries. Members will be asked for their BIC and IBAN numbers when setting up a NEW direct debit. There is no action required for Existing direct debits.
Members will be allocated our BIC and the member’s IBAN which you can request from us at any time.
An Implementation date to be announced soon.
