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Summaries of EU Legislation

Single Euro Payments Area Regulation

 

SUMMARY OF:

Regulation (EU) No 260/2012 — technical and business requirements for credit transfers and direct debits in euro

WHAT IS THE AIM OF THE REGULATION?

It sets out the rules and technical requirements for credit transfers and direct debit transactions in euro within the single euro payments area (SEPA).

KEY POINTS

  • National accounts used for credit transfers and direct debits within each country should also be accessible EU-wide. This is known as ‘reachability’.
  • The same rules apply to both national and cross-border operations.
  • Payment systems should be interoperable with each other.
  • Credit transfers and direct debit transactions must meet certain conditions, including:
    • the use of international bank account numbers, bank identifier codes and a financial messaging standard for all payments in euro;
    • the right of payers to issue specific instructions, such as the amount and frequency of a direct debit.
  • The legislation set the following entry dates:
    • from 1 February 2014 (later postponed to August 2014), all credit transfers and direct debits in euro to be made under the same format in EU countries with the euro as national currency;
    • from 31 October 2016, all credit transfers and direct debits in euro to be made under the same format also in non-euro EU countries;
    • from 1 February 2017, abolition of multilateral interchange fees* for direct debits;
    • from 1 February 2016, an end to compulsory use of the business identifier code (BIC).
  • EU countries had to:
    • appoint a national authority with the necessary powers to ensure the legislation is fully implemented;
    • lay down, by 1 February 2013, rules on penalties for any violations of the legislation;
    • establish adequate and effective out-of-court complaint and redress procedures.
  • The European Commission:
    • was given the five-year renewable power from 31 March 2012 to adopt delegated acts;
    • had to present a report by 1 February 2017 on implementation of the legislation.
  • Regulation (EU) No 248/2014 amended Regulation (EU) No 260/2012, introducing certain transitional arrangements. These ended on 1 February 2016.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 31 March 2012.

BACKGROUND

  • The single euro payments area harmonises the way cashless euro payments are made across the EU. It makes them as easy as national payments.
  • SEPA covers payments in euro in the EU and Iceland, Norway, Switzerland, Liechtenstein, Andorra, Monaco, San Marino and the Vatican City.
  • For more information, see:

KEY TERMS

Multilateral interchange fees: fees which the sellers of goods and services pay for the cross-border payments they receive by consumer debit and credit cards.

MAIN DOCUMENT

Regulation (EU) No 260/2012 of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009 (OJ L 94, 30.3.2012, pp. 22-37)

Successive amendments to Regulation (EU) No 260/2012 have been incorporated into the original text. This consolidated version is of documentary value only.

RELATED DOCUMENT

Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001 (OJ L 266, 9.10.2009, pp. 11-18)

See consolidated version.

last update 14.05.2019

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