Cross-border payments in euros

The aim of the single euro payments area (SEPA) is to ensure that making electronic payments throughout the entire euro area is as easy as making cash payments and that there are no extra charges when making an electronic payment in euros in another European (EU) country.

ACT

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.

SUMMARY

The aim of the single euro payments area (SEPA) is to ensure that making electronic payments throughout the entire euro area is as easy as making cash payments and that there are no extra charges when making an electronic payment in euros in another European (EU) country.

WHAT DOES THE REGULATION DO?

The rules require banks to levy the same charges for electronic payment transactions in euros conducted cross-border, between two European countries, and for corresponding electronic payment transactions* in euros conducted nationally, within the same European country.

KEY POINTS

Electronic payment transactions include credit transfers, direct debits, withdrawals from automatic teller machines, payments by debit and credit cards, as well as cash transfers.

The payments concerned are to be made in euros or in the national currency of EU countries wishing to apply the regulation. Thus, following a request from Sweden, the principle of equality of charges also applies to payments made in Swedish kronor.

In practical terms, banks have to provide their clients with an international bank account number (IBAN) to be used when making cross-border electronic payment transactions. Banks also have to give them a bank identifier code (BIC). These transfers therefore cost no more than transfers made within the same country.

Compliance with obligations

If a bank does not comply with the charging rules, its customers or any interested party may submit a complaint to the national authority.

To guarantee that disputes arising between banks and customers are settled, EU countries must establish effective out-of-court complaint and redress procedures. Penalties can be handed out in case of infringements.

WHEN DOES THE REGULATION APPLY?

From 1 November 2009.

KEY TERMS

*Corresponding payments: payments with similar characteristics, such as same amount, payment channel - e.g. by ATM (automated teller machine), online, etc. - or payment instrument used - cards, cheques, direct debits or credit transfers.

Last updated: 19.06.2015