The aim of the single euro payments area (Sepa)- which will be officially launched by the European Central Bank (ECB) next Monday - is to dismantle cross-border barriers and drive down costs for non-cash payments in the euro zone to the level of domestic transfers.

Although Denmark is not currently in the euro zone, banks and processors in the country - like those in the UK - that do business in the region will need to be Sepa-compliant.

Anders Dam, CEO of Jyske Bank - one of the banks signed up to PBS's Sepa services - says: "Although Denmark currently is not a euro country, we are fully aware where the future market lays. We want to be ready in time, and we welcome that PBS, with whom we have a long well established business relation, is capable of bringing this service to market."

PBS says it is "investing heavily" in its future payment and information systems in order to be able to compete following the introduction of Sepa.

Flemming Jensen, CEO, PBS, says the deal with the 117 banks "represents PBS' initial Sepa effort".

"We are looking forward to continuing and expanding our cooperation with this large group of banks. PBS is sending a clear message: We want to provide Sepa services to banks and their customers - in Denmark and abroad," adds Jensen.

The Sepa initiative is expected to intensify competition and consolidation in the euro zone so that ultimately just a few payment processors will remain. Research released by Accenture last year predicted that folowing Sepa, debit and credit card schemes will be dominated by MasterCard and Visa, with only four domestic card schemes offering full Sepa payments services.

On 28 January 2008 an important milestone in the Sepa migration process will be reached, with the official launch of the first Sepa payment instrument for credit transfers. The event is being marked by a high-level meeting organised by the European Commission, the European Central Bank and the European Payments Council at the Charlemagne Building in Brussels.