LONDON — Euro-zone countries today are moving forward with the switch to the new Single Euro Payment Area (SEPA) for credit transfers and direct debits.
After 15 years of development in one of the largest financial integration projects ever started, SEPA integrates payment methods within the E.U. and is designed to reduce delays in cross-border bank transfers from an average of five days to just one.
SEPA, the European Central Bank says, will improve consumer protection for direct debits, with new rules being implemented for the facilitation of refunds.
Businesses also will be given the opportunity to widen their reach in Europe as a result of a single system and set of accounts for all their euro trade in 16 European countries.
The European Commission granted a six-month extension for member states, but as of today SEPA's light is green.
Starting Oct. 30, 2016, the legislation goes further. At that time, SEPA also will apply to Euro-denominated transactions in non-Eurozone countries, including the U.K.
As the initial six-month transition period is set to begin drawing to a close, merchants that have not previously moved to SEPA for accepting payments could find themselves at odds with the legislation, said Gary Jackson, managing vice president of sales and Internet markets for CCBill.
“While some countries such as Belgium and Spain have already ended the transition period, other European banks are operating on different timelines. While this can be confusing to merchants within those regions, the good news is payment solutions — such as our European Direct Debit service — are available to help them continue processing transactions uninterrupted.”
Said Jason Kirk, vice president of product development for CCBill: “For merchants in those regions, it is imperative the processing partner they work with is not only fully aware of SEPA requirements, but also ready to help out with features and solutions to ensure transactions can continue. This includes having a payment service and forms system that is capable of serving the respective European countries and their consumers.”