Single Euro Payments Area (SEPA) – Meaning, Objectives, Countries
The Single Euro Payments Area (SEPA) is a collective association created in Europe that allows companies, individuals and public bodies to make payments in euros without using cash. These payments can be made using a single bank account for payment transactions in different part of Europe within the SEPA zone.
Companies and other economic agents can make and receive payments in euros, with equal conditions, rights and obligations, all regardless of their location and whether or not those payments have required cross-border processes.
The SEPA zone is made up of 27 member countries of the European Union to which must be added Liechtenstein, Norway, Iceland, Switzerland, San Marino and Monaco.
Items affected by the Single Euro Payments Area Zone
- Credit and debit cards: used to withdraw cash at ATMs.
- Bank transfers: through which the payer, orders his bank to pay funds to a beneficiary.
- House debits: which are transfers agreed between the creditor and the debtor to make periodic payments. There must be a prior authorization from the debtor to the creditor.
Single Euro Payments Area (SEPA) does not affect checks, receivables, or country-specific products.
Objectives of Single Euro Payments Area Zone
- Standardization of payments in euros: Equal time limits, equal levels of fraud, equal processes, that all electronic processes are carried out by direct processing, without differences between national and international payments in the SEPA area.
- Increased competition: through a high number of competitors and the elimination of incompatible niches through standardization.
- Reduce cash and encourage the use of electronic money.
- Improve the monitoring of the circulation of electronic money, especially in relation to the crimes of money laundering, financing of terrorism, organized crime and tax fraud.
