The SEPA Regulation | Information for consumers
The SEPA Regulation
May 2013*
The SEPA Regulation | Information for consumers
*This guidance was previously developed and published by Payments Council, which was
replaced by a new trade association – Payments UK - at the end of June 2015. To this end the
documentation has been rebranded but the content has not been updated, therefore the original
date of the guidance on the front of the document should be referenced as at the time of original
publication.
This leaflet is designed to provide consumers with information on developments in European
payments legislation, specifically the adoption of the SEPA Regulation, which may impact on the
way you make and receive electronic euro payments.
These changes only affect electronic payments made in euro within the EU and EEA (which are
defined below). They do not apply to cash, cheque or card transactions and they do not apply to
payments in non-euro currencies like Sterling.
What is SEPA?
The Single Euro Payments Area (SEPA) is a payment-integration initiative of the European Union. It aims
at the creation of an integrated euro payments market and the harmonisation of national and cross-border
euro payment systems, both at a technical level and in terms of procedures and the customer experience,
so that payments can flow quickly, simply and cheaply across the whole of Europe. The latest regulation –
the SEPA Regulation – will help to enable this.
SEPA forms a key part of the European Commission’s vision of a Single Market. The Single Market is
intended to extend to all European Union (EU) Member States as well as Norway, Iceland, Liechtenstein
(which together with the EU countries makes the European Economic Area (EEA)), as well as Switzerland
and Monaco, but with a focus on the eurozone (i.e. those states that have adopted the euro as their
currency).
Who is impacted?
Anyone (e.g. a citizen, merchant, business or public administrative organisation) who makes a payment in
euros will be affected in some way by the SEPA Regulation. However, it is important to emphasise that
SEPA payments are always electronic euro payments (euro cash/cheques are outside the scope of the
SEPA Regulation). The SEPA Regulation does not affect payments in non-euro currencies such as
Sterling.
The SEPA Regulation | Information for consumers
The banking industry has been co-operating for some time through the work of the European Payments
Council (“EPC”) and has already created three new euro payment schemes, which define the rules,
practices and standards for moving funds from account A to account B: the SEPA Credit Transfer scheme
(“SCT”), the SEPA Core Direct Debit scheme (“SDD”) and the SEPA Direct Debit Business-to-Business
scheme (“SDD B2B”).

Launched on 28 January 2008

Used to send payments in euro nationally or cross-border

Launched on 2 November 2009

Only the Core scheme is used by consumers

Both schemes are 'pull' payments, i.e. payment is initiated by the person or business getting paid

In the Core scheme there is a 'no questions asked' refund right for consumers giving you much more
control over your payments. Refunds may be claimed within eight weeks of the debit date for authorised transactions and within 13 months for unauthorised transactions.
NB. A SEPA payment is always an electronic payment sent in euro within the SEPA area.
The SEPA Regulation | Information for consumers
The ‘SEPA Regulation’ entered into force on 31 March 2012. The main aim of the SEPA Regulation is to
ensure the migration of existing national euro payments to the harmonised, pan-European SEPA payment
schemes (SCT and SDD) so that consumers and businesses can make and receive cross-border euro
payments across Europe as efficiently and easily as domestic euro payments are made today. To achieve
this the SEPA Regulation sets end-dates by when existing national euro payment schemes need to be
replaced with the SEPA schemes. These end-dates are:
1 February 2014 - in euro Member States
31 October 2016 - in non euro Member States (or one year after joining the euro, if earlier)
The SEPA Regulation does apply in the UK, albeit with increased flexibility. Whilst UK-located banks/
payment service providers (“PSPs”) do not automatically have to sign up to the SEPA Schemes, the UK
payment industry has been engaged with the creation of the SEPA Schemes and is committed to making
SEPA a reality. As a result, as of April 2013: 40 UK-based institutions had already adhered to the SEPA
Credit Transfer Scheme; 21 had joined the SEPA Direct Debit Core Scheme; and 13 had joined the SEPA
Direct Debit Business-to-Business Scheme.
You can find out if your PSP is reachable for / offering SEPA payments by checking the EPC’s register of
participants (http://epc.cbnet.info/content/adherence_database) or by speaking to your PSP directly.
The SEPA Regulation | Information for consumers
UK consumers who use the Sterling payment schemes (such as Faster Payments and Bacs) are
unaffected. The UK Sterling schemes will continue to operate alongside the SEPA schemes.
However, UK-based consumers who make or receive payments in euros may notice some
changes as a result of the SEPA Regulation, because the rules also apply to countries in Europe
that do not have the euro as currency, like the UK.
The SEPA schemes make it easier to transfer euro between the UK and other SEPA countries, for
example for individuals who are working or studying abroad, or who have an overseas property. The
SEPA Regulation provides consumers with the assurance of common rules and predictable maximum
time cycles for both one-off and recurring transactions (like direct debits). For example, a customer can
use a euro account in the UK, into which a salary earned in Spain can be paid via a SEPA Credit
Transfer. They can also pay a recurring utility bill in France by making a regular payment in euro from a
UK account using the SEPA Credit Transfer scheme, or by setting up a SEPA Direct Debit with the
French utility company so that payments are made in euro from their UK euro account.
Currently, consumers wanting to make a SEPA payment will be asked by their PSP to provide the IBAN
(International Bank Account Number) and BIC (Business Identifier Code) of the destination account.
Consumers should always make sure that they have been given the correct IBAN and BIC by the payee.
One change introduced by the SEPA Regulation is that, from 31 October 2016, consumers in the UK will
no longer be asked by their PSP to provide the BIC when making a SEPA payment and will only
need to provide the IBAN of the account into which they wish to make a payment. However, this change
only applies to SEPA payments – payments sent abroad in other currencies (e.g. Dollars or Sterling) or
sent in euro but to a destination outside SEPA will still require the BIC to assist in routing the payment to
the correct destination account.
The SEPA Regulation | Information for consumers
The SEPA Regulation also provides additional debtor protection measures for SEPA direct debits. If
consumers use SEPA direct debits (for example, to pay monthly bills due to a French utility company)
they are now able to instruct their PSP on how to handle incoming collections by specific billers (like the
utility company). Consumers may draw up black lists (blocking direct debits from certain payees) or white
lists (acquiring direct debits from certain payees), set maximum payment amounts, and specify the
payment intervals. Additionally, they could choose to block any direct debit collections from their account.
In cases where a direct debit mandate does not provide for the right to a refund, consumers may instruct
their PSP to check whether the amount and periodicity of each incoming direct debit transaction is equal
to the amount and periodicity agreed on the mandate.
Finally, the SEPA Regulation also states that consumers cannot be restricted in choosing the account
from which they would like to make their euro credit transfers or direct debits. For example, a French
utility company cannot insist that a customer pays direct debits from a French bank account. Equally,
consumers cannot be required to receive euro credit transfers or direct debits into an account held in a
specific country.
There are European rules around charges for SEPA payments – put simply, a PSP must charge the
same for a cross-border SEPA payment as it would for a national SEPA payment. In practice this means
that the cost of making a SEPA payment can vary between countries, especially where the euro is not the
national currency. The actual charge levied by a PSP for a SEPA payment is a competitive matter. If you
are unhappy with the charges levied by your PSP it may be worth shopping around for a better deal.
The charges for SEPA payments are paid on a shared basis, i.e. the payee and payer are charged
separately and individually by their respective PSPs for a payment. This gives consumers the benefit of
knowing that once a SEPA payment has been sent no additional charges will be deducted from the
amount sent.
You should speak to your PSP for more information on charges.
The SEPA Regulation | Information for consumers

Consumers that bank with a PSP offering the SEPA Schemes should speak to them for more
information or you can email Payments UK at [email protected]

You can watch the European Payments Council’s introductory video on SEPA on their website http://
www.europeanpaymentscouncil.eu/video_audio.cfm?tid=4.

The European Central Bank also has a video on SEPA (‘What is SEPA?’) available on its website:
http://www.ecb.int/paym/sepa/html/index.en.html

SEPA – Single Euro Payments Area - all European Union Member States as well as Norway, Iceland,
Liechtenstein, Switzerland and Monaco but with a focus on the eurozone (i.e. those states that have
adopted the euro as their currency).

EPC – European Payments Council

SCT – SEPA Credit Transfer

SDD – SEPA Direct Debit (the Core scheme)

SDD B2B DD – SEPA Business-to-Business Direct Debit (only for use by corporates)

PSP – Payment Service Provider, e.g. a bank

PSU – Payment Service User, e.g. consumers and businesses

IBAN – International Bank Account Number

BIC – Business Identifier Code
The SEPA Regulation | Information for consumers