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Published on Friday, February 24, 2012
An overwhelming majority of Members of the European Parliament (MEPs) voted 'yes' to the new rule, which means that European banks must begin making SEPA Credit Transfers and SEPA Direct Debits by 1 February 2014 at the latest.
The European Parliament took their initial decision to intervene in SEPA legislation after the European Payments Council's own attempts to drive SEPA adoption failed. With the deadline now firmly in place, the Parliament believes that Europe can now ensure its banks compete fairly, avoid unnecessary cross-border administration fees and accelerate payments transfers. Overall, it is estimated that SEPA could save clients, financial institutions and businesses as much as 123 billion Euros within 6 years.
And the Commission's new-found regulatory urgency seems to have had the desired effect, with the SEPA initiative finally starting to pay dividends for Europe - four years and one month after its launch in January 2008. 34% of respondents to a recent Payments Survey use SEPA Credit Transfers (SCTs) and 14% use SEPA Direct Debits (SDDs), figures which are expected to rise to 47% and 34% respectively by 2015.
Although many companies still lack a clear understanding of the way SEPA works and the benefits it can provide, such clear progress towards the eventual goal of electronic payments without borders is encouraging.
SEPA authority Sari Essayah, MEP, says: "The SEPA regulation really benefits citizens. It will enable them to make payments from one bank account to others all over Europe, just like a normal domestic payment. Companies will benefit too, by not needing more than one bank account in Europe for each payment purpose."