April 2009

European Payments Council gives go ahead for the planned launch of two SEPA Direct Debit schemes

On 31st March, the European Payments Council took another massive step towards achieving its long-term aim of creating a unified Single Euro Payment Area (SEPA) by announcing that they would go ahead with their plans for two SEPA Direct Debit schemes -one for consumers and one for businesses. These will be available from November 2nd 2009.

European banks will be able to sign up to the schemes as of May 1st, but they will not be capable of physically offering the services until the go live date in November when the Payment Services Directive (PSD) legislation will be in place.

Since its inception in 2008, the initiative has already delivered the SEPA Credit Transfer (SCT) scheme and the introduction of SEPA Direct Debits marks another impressive milestone on the road to a single domestic payments market.

EPC Chair, Gerard Hartsink, commented: "The introduction of the two SEPA Direct Debit Schemes demonstrates the continued commitment of the European banking industry to the creation of one domestic euro payments market and its ability to deliver on time the euro payment schemes that are the foundation of SEPA. SEPA Direct Debit services offer citizens, companies and public administrations a new and unique opportunity to make euro direct debit payments within and across 31 European countries."

Typically, Direct Debits are used to pay for recurring payments such as subscriptions, rents and bill settlements. The benefits of the service are twofold: for the recipient, better cash flow forecasting and the knowledge that the payment will arrive in a timely manner as agreed; for the payer, a hassle-free funds transfer method which, if employed properly, requires little to no manual intervention.

For the first time ever, via the SEPA framework, customers will be able to send and receive Direct Debit payments anywhere across the 31 participating European countries safely, securely and as simply as traditionally processed within their own borders.

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