Sepa goes live

Sepa goes live

The first stage implementation of the single euro payments area (Sepa) - which aims to make cross-border payments as cheap as domestic transactions - has gone live with the official launch of the Sepa payment instrument for credit transfers.

The launch of the Sepa credit transfer (SCT) scheme is being marked today by a high-level meeting organised by the European Commission (EC), the European Central Bank (ECB) and the European Payments Council (EPC) at the Charlemagne Building in Brussels.

The SCT scheme will enable euro credit transfers to be made within a maximum of three days, without any deductions from the principal amount.

In a joint statement, the EC and ECB say Sepa is "a natural progression to the introduction of the euro and another major step in realising the full potential of the single market for Europe".

EBA Clearing is reporting a successful start to its Step2 Sepa credit transfer service on its pan-European automated clearing house (PE-ACH) platform. More than 100 banks tested the new service with EBA Clearing and SIA-SSB in the second half of 2007.

EBA Clearing says 90 direct participants have sent payments through the service today. Participant banks began submitting payment files to Step2 SCT on 25th January and at the start of the Step2 system, these payments were routed, delivered and cleared.

UK payments association Apacs says that although Britain is not in the euro zone, several banks based in the country are joining the SCT scheme from the launch. Apacs says the banks involved at this stage account for about 85% of the UK payments market and this is expected to increase over time.

Meanwhile UK transaction processing outfit VocaLink says it has also processed its first Sepa transaction - from Austrian bank Bawag PSK to Fortis in Belgium. A number of major banks - including ABN Amro, Bank of America, Citi, Dexia Bank, Fortis, Lloyds TSB, RBS and Santander - have signed up for the VocaLink €CSM partnership, which provides banks and clients with Sepa-related services.

European payments processor Equens says it has also processed its first Sepa credit transfer payments today.

Citing research conducted by Capgemini, the EC says Sepa could produce savings of up to EUR123 billion over the next six years. A further EUR238 billion could be saved if the Sepa platform can be used as an electronic invoicing platform.

Research released by the ECB last year found that banks will incur the most costs in the period where national and Sepa payment infrastructures co-exist. The ECB has urged financial firms to implement Sepa changes as quickly as possible in order to achieve economies of scale as payments revenues begin to drop due to competitive pressures.

However a study conducted by Finextra last year found that European bankers were pessimistic about their ability to meet Sepa deadlines and that most banks do not expect their corporate customers to be fully Sepa-compliant until after 2010.

Only eight per cent of the 100 banks polled by Finextra were fully Sepa-compliant and over half did not expect to be able to meet today's deadline for Sepa credit transfers.

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