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Deadline Set For Pan-European Payment System

by Ulrika Lomas, LawAndTax-News.com, Brussels

21 December 2010


The European Commission (EC) has proposed to set European Union (EU)-wide end-dates for the migration of the old national credit transfers and direct debits to recently-created Single Euro Payments Area (SEPA) instruments.

The SEPA’s objective is to increase efficiency and competition so that high-quality and competitively priced electronic payment products exist throughout the whole of the EU. It would mean that national credit transfers and direct debits are phased out and the recently created pan-European systems take their place, respectively, 12 and 24 months after the entry into force of the relevant regulation.

Europeans would be able to rely on one bank account to make euro payments across 32 countries while enjoying highly competitive services provided by banks. Under the SEPA, as from 2012, money transfers would reach the beneficiary at least by the end of the next business day or faster and no deductions will be made to the amounts transferred. As a result, the process of paying bills would be even more convenient.

In addition, businesses would enjoy common standards, faster settlement and simplified processing for payments that will improve cash flow, reduce costs and facilitate the access to new markets.

The Internal Market and Services Commissioner, Michel Barnier, said: "Soon we will move to a single pan-European payment system in Europe. It means that making payments cross-border will become as easy as making them at home. Consumers will only need one bank account and their payments will be faster, cheaper and safer. Businesses will benefit from one set of standards and much simpler processes. The proposal adopted today fixes end-dates to make this pan-European system a reality, hopefully as early as 2012."

The EC's proposal now passes to the European Parliament and the member states for consideration.

TAGS: European Commission | law | banking | financial services | regulation | European Union (EU) | services | Europe

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