Misplaced Pages

#203796

42-628: The SEPA (Single Euro Payments Area) is a self-regulatory initiative by the European banking sector represented in the European Payments Council , which defines the harmonization of payment products, infrastructures and technical standards (Rulebooks for credit transfer / direct debit , BIC , IBAN , ISO 20022 XML message format, EMV chip cards/terminals). The PSD provides the legal framework within which all payment service providers must operate. The PSD's purpose in regard to

84-641: A country are normally part of SEPA. However, the following countries have special territories which are not part of SEPA: Jurisdictions using the euro that are not in SEPA: Akrotiri and Dhekelia , French Southern and Antarctic Lands and Kosovo . Jurisdictions in Europe not formally belonging to SEPA normally use SEPA schemes anyway for international euro payments, especially to or from the eurozone, with exceptions such as fees charged and BIC required. SEPA guarantees that euro payments are received within

126-406: A guaranteed time, and banks are not allowed to make any deductions of the amount transferred, introduced by a regulation in 2001. Banks and payment institutions still have the option of charging a credit-transfer fee of their choice for euro transfers if it is charged uniformly to all EEA participants, banks or payment institutions, domestic or foreign. This is relevant for countries which do not use

168-878: A harmonised application of prudential rules. Finally, the EBA is mandated to assess risks and vulnerabilities in the EU banking sector through, in particular, regular risk assessment reports and pan-European stress tests . Other tasks set out in the EBA's mandate include: To perform these tasks, the EBA can produce a number of regulatory and non regulatory documents including binding Technical Standards, Guidelines, Recommendations, Opinions, Questions and Answers (Q&As) and ad-hoc or regular reports. The Binding Technical Standards are legal acts which specify particular aspects of an EU legislative text (Directive or Regulation) and aim at ensuring consistent harmonisation in specific areas. The EBA develops draft BTS which are finally endorsed and adopted by

210-735: A payee, the delay being less than ten seconds, initially, with a maximum of twenty seconds in exceptional circumstances. This scheme was launched in November 2017, and was at that time operational for end customers in eight Eurozone countries. As of 2024, not all banks offer their customers instant transfers; however, in March 2024 the EU adopted the Instant Payments Regulation which requires all banks to offer instant transfers from January 2025 (incoming transfers) / October 2025 (outgoing transfers). Direct debit functionality

252-510: A solo and consolidated basis using XBRL in Eurofiling architecture taxonomies. All regulated organisations in the UK must use COREP to make their regular statutory reports from 1 January 2014 onwards. The national authorities that are voting members of the EBA's Board of Supervisors have been, from creation to early 2024: The EBA chair has been granted voting status by the 2019 revision of

294-735: Is a payment integration initiative of the European Union for simplification of bank transfers denominated in euros . As of 2020 , there were 36 members in SEPA, consisting of the 27 member states of the European Union , the four member states of the European Free Trade Association ( Iceland , Liechtenstein , Norway and Switzerland ), and the United Kingdom . Some microstates participate in

336-538: Is a regulatory agency of the European Union headquartered in La Défense , Île-de-France . Its activities include conducting stress tests on European banks to increase transparency in the European financial system and identifying weaknesses in banks' capital structures. The EBA has the power to overrule national regulators if they fail to properly regulate their banks. The EBA is able to prevent regulatory arbitrage and should allow banks to compete fairly throughout

378-506: Is based on the International Bank Account Numbers (IBAN). Domestic euro transactions are routed by IBAN; earlier national-designation schemes were abolished by February 2014 (with delays in some countries), providing uniform access to the new payment instruments. Since February 2016 Eurozone payment system users no longer require BIC sorting information for SEPA transactions; it is automatically derived from

420-482: Is provided by two separate schemes. The basic scheme, Core SDD , is primarily targeted at consumers and was launched on 2 November 2009. Banks offering SEPA payments are obliged to participate in this scheme. A second scheme, B2B SDD , is targeted towards business users. Banks offering SEPA payments are not obliged to participate in this scheme (participation is optional). Among the differences with respect to Core SDD : SEPA consists of 38 countries: All parts of

462-903: Is room for interpretation, it is expected that several PAIN specifications will be published in SEPA countries. Businesses, merchants, consumers and governments are also interested in the development of SEPA. The European Associations of Corporate Treasurers (EACT), TWIST , the European Central Bank , the European Commission , the European Payments Council, the European Automated Clearing House Association (EACHA), payments processors and pan-European banking associations – European Banking Federation (EBF), European Association of Co-operative Banks (EACB) and

SECTION 10

#1732782677204

504-801: The Committee of European Banking Supervisors (CEBS). In continuity with the CEBS secretariat and until 30 March 2019 it was located in London . As a consequence of the United Kingdom's planned withdrawal from the EU , the European Commission worked on plans to move the EBA (alongside the European Medicines Agency ) out of the United Kingdom, to keep it inside the remaining EU member states. Future homes considered for

546-480: The Council of the European Union passed PSD2. Member states then had two years to incorporate the directive into their national laws and regulations. On 27 November 2017, Commission delegated Regulation (EU) 2018/389 supplemented PSD2 with regard to regulatory technical standards for strong customer authentication and common and secure open standards of communication. The EU and many banks pushed this development with

588-555: The European Parliament mandated that charges in respect of cross-border payments in euros (of up to EUR 50,000) between EU member states shall be the same as the charges for corresponding payments within the member state. However, the EU Regulation does not apply to all SEPA countries; the most significant difference is the inclusion of Switzerland in SEPA but not the EU. The rule of the same price applies even if

630-583: The European Savings Banks Group (ESBG) – are playing an active role in defining the services which SEPA will deliver. Since January 2008, banks have been switching customers to the new payment instruments. By 2010, the majority were expected to be on the SEPA framework. As a result, banks throughout the SEPA area (not just the Eurozone ) need to invest in technology with the capacity to support SEPA payment instruments. SEPA clearance

672-442: The 2009 update "to be functioning well. For example, charges for €100 transfers followed a further downward trend to €0.50 euro-area average for transfers initiated online and remained low, at €3.10 for transfers initiated at the bank counter". In October 2021 the EBA launched a public consultation on the amendment of its Regulatory Technical Standards (RTS) on strong customer authentication and secure communication (SCA&CSC) under

714-580: The EBA is to contribute, through the adoption of binding Technical Standards (BTS) and Guidelines, to the creation of the European Single Rulebook in banking. The Single Rulebook aims at providing a single set of harmonised prudential rules for financial institutions throughout the EU, helping create a level playing field and providing high protection to depositors, investors and consumers. The Authority also plays an important role in promoting convergence of supervisory practices to ensure

756-592: The EBA regulation. Non-voting members include representatives from the European Commission , ECB Supervisory Board , European Systemic Risk Board , European Securities and Markets Authority , European Insurance and Occupational Pensions Authority , as well as the supervisory authorities for non-EU members of the European Economic Area , namely Iceland ( Financial Supervisory Authority / FME), Liechtenstein ( Finanzmarktaufsicht / FMA), and Norway ( Finanstilsynet ). In addition, in countries where

798-419: The EU. The EBA will prevent a race to the bottom because banks established in jurisdictions with less regulation will no longer be at a competitive advantage compared to banks based in jurisdictions with more regulations as all banks will henceforth have to comply with the higher pan European standard. The EBA was established on 1 January 2011, upon which date it inherited all of the tasks and responsibilities of

840-690: The European Commission. Contrary to other documents such as Guidelines or Recommendations, the BTS are legally binding and directly applicable in all Member States. Common Reporting (COREP) is the standardised reporting framework issued by the EBA for the Capital Requirements Directive reporting. It covers credit risk , market risk , operational risk , own fund and capital adequacy ratios . This reporting framework has been adopted by almost 30 European countries. Regulated institutions are periodically required to file COREP reports, on both

882-532: The European Payments Council (EPC), made up of European banks. The EPC is committed to delivering three pan-European payment instruments: To provide end-to-end automated direct payment processing for SEPA-clearing, the EPC committed to delivering technical validation subsets of ISO 20022 . Whereas bank-to-bank messages (pacs) are mandatory for use, customer-to-bank payment initialization (PAIN) message types are not; however, they are strongly recommended. Because there

SECTION 20

#1732782677204

924-501: The IBAN for all banks in the SEPA area. An instant 24/7/365 payment scheme named SCT Inst went live on 21 November 2017 allowing instant payment 24 hours a day and 365 days a year. The participating banks will handle the user interface and security, like for existing SEPA payments, e.g. web sites and mobile apps. As of August 2014, 99.4% of credit transfers, 99.9% of direct debit, and 79.2% of card payments have been migrated to SEPA in

966-569: The PIs and to monitor compliance with business conduct rules, as transposed into national legislation. The PSD was updated in 2009 (EC Regulation 924/2009) and 2012 (EU Regulation 260/2012). An implementation report from 2013 found the PSD facilitated "provision of uniform payment services across the EU" and reduced legal and production costs for many payment service providers and that "the expected benefits have not yet been fully realised". The same report found

1008-407: The PSD was a maximum harmonisation directive, certain elements allowed for different options by individual countries. The final adopted text of PSD went into force 25 December 2007 and was transposed into national legislation by all EU and EEA member states by 1 November 2009. The PSD contained two main sections: Each country had to designate a "competent authority" for prudential supervision of

1050-720: The Payment Services Directive (PSD2) with regard to 90-day exemption from SCA for account access. In the UK, the FCA published PS 21/19 (“policy statement”) for “Changes to the SCA-RTS and to the guidance in ‘Payment Services and Electronic Money – Our Approach’ and the Perimeter Guidance Manual” . This document proposed a number of modifications including to Article 10 of the UK- RTS, by replacing

1092-450: The agency were Brussels , Dublin , Frankfurt , Luxembourg , Paris , Prague , Vienna and Warsaw . In the end, Paris was selected by drawing of lots to house the EBA, at 18:40 CET on Monday, 20 November 2017. In June 2021, the EBA said that banks in the European Union must have a ten-year plan that explains how they will deal with environmental, social, and government ( ESG ) risks to their bottom line. The main task of

1134-638: The banking supervisor is separate from the central bank , the bank resolution authority, the financial consumer protection authority, and/or the deposit insurance authority, the latter authorities may also attend the meetings of the Board of Supervisors under conditions set in Article 40 of the EBA Regulation. The Single Resolution Board has observer status within the EBA Board of Supervisors, and

1176-431: The development and use of innovative online and mobile payments such as through open banking , and make cross-border European payment services safer. Then-Commissioner Jonathan Hill , responsible for Financial Stability, Financial Services and Capital Markets Union, said, "This legislation is a step towards a digital single market; it will benefit consumers and businesses, and help the economy grow." On 16 November 2015,

1218-403: The directive is the demand for common and secure communication (CSC). eIDAS-defined qualified certificates for are demanded for website authentication and electronic seals used for communication between financial services players. The technical specification ETSI TS 119 495 defines a standard for implementing these requirements. PSD2 went into full effect on 14 September 2019, but due to delays in

1260-503: The euro area. The official progress report was published in March 2013. In October 2010, the European Central Bank published its seventh progress report on SEPA. The European Central Bank regards SEPA as an essential element to advance the usability and maturity of the euro. SEPA VS SWIFT: UNDERSTANDING INTERNATIONAL MONEY TRANSFERS European Banking Authority The European Banking Authority ( EBA )

1302-673: The euro. This means that domestic payments in SEPA countries not using the euro will continue to use local schemes, but cross-border payments will use SEPA and the euro with eurozone countries to a high degree. The Nordic countries (other than Finland) do not use the euro and have no plans to adopt the euro. These four countries (Sweden, Denmark, Norway, and Iceland) started initiatives during 2017–2019 for simpler, faster, and cheaper cross-border payments between one another. These initiatives have however not been successful. The different functionalities provided by SEPA are divided into separate payment schemes. SEPA Credit Transfer ( SCT ) allows for

Payment Services Directive - Misplaced Pages Continue

1344-543: The euro; where domestic transfers in euros by consumers are uncommon, and inflated fees for euro transfers might be charged in these states. Sweden and Denmark have legislated that euro transfers shall be charged the same as transfers in their own currency; which has the effect of giving free euro ATM withdrawals, but charges for ATM withdrawals in other currencies used in the EU. In regulation (EC) 924/2009 (the Cross-border Payments Regulation),

1386-426: The eurozone, for example when they take a job in a new country. The project includes the development of common financial instruments , standards, procedures, and infrastructure to enable economies of scale . As of 2007 , it was estimated this could reduce the overall cost to the European economy of moving capital around the region by up to 2–3% of total GDP ). SEPA does not cover payments in currencies other than

1428-505: The first milestone was missed due to a delay in the implementation of enabling legislation (the Payment Services Directive or PSD) in the European Parliament . Direct debits became available in November 2009, which put time pressure on the second milestone. The European Commission has established the legal foundation through the PSD. The commercial and technical frameworks for payment instruments were developed by

1470-548: The implementation, the European Banking Authority allowed for a time extension of the strong customer authentication (SCA) until 31 December 2020. Privacy First, a privacy organisation, criticised the open banking elements of the new legislation, claiming it focuses too much on improving competition and innovation while the privacy interests of account holders are overlooked. Single Euro Payments Area The Single Euro Payments Area ( SEPA )

1512-421: The new Payments Service Directive 2 (PSD2), which came into force on 13 January 2018. Banks then adapted to these changes which opened many technical challenges, but also many strategic opportunities, such as collaborating with fintech providers, for the future. An important element of PSD2 is the requirement for strong customer authentication on the majority of electronic payments. Another important element of

1554-464: The payments industry was to increase pan-European competition with participation also from non-banks, and to provide for a level playing field by harmonizing consumer protection and the rights and obligations for payment providers and users. The PSD's purpose in regard to consumers was to increase customer rights, guarantee faster payments (no later than next day since 1 January 2012), describe refund rights, and give clearer information on payments. Although

1596-559: The requirement for the PSU to re-authenticate with their ASPSP every 90 days to allow AISP access with the requirement for the PSU to reconfirm their consent with their AISP directly. On 8 October 2015, the European Parliament adopted the European Commission proposal to create safer and more innovative European payments (PSD2, Directive (EU) 2015/2366). The current rules aim to better protect consumers when they pay online, promote

1638-414: The technical schemes: Andorra , Monaco , San Marino , and Vatican City . SEPA covers predominantly normal bank transfers. Payment methods which have additional optional features or services, such as mobile phone or smart card payment systems, are not directly covered. However, the instant SEPA payment scheme facilitates payment products also on smart devices . The aim of SEPA as stated in 2008

1680-408: The transaction is sent as an international transaction instead of a SEPA transaction (common before 2008, or if any involved bank does not support SEPA transactions). Regulation 924/2009 does not regulate charges for currency conversion so charges for non-euro transactions can still be applied (if not banned by national law). There were two milestones in the establishment of SEPA: For direct debits,

1722-574: The transfer of funds from one bank account to another. SEPA clearing rules require that payments made before the cutoff point on a working day be credited to the recipient's account by the next working day. The scheme was introduced in January 2008. In February 2014 it replaced the national credit transfer schemes, and later made the use of International Bank Account Number mandatory for transfers. SEPA Instant Credit Transfer ( SCT Inst ), also called SEPA Instant Payment, provides for instant crediting of

Payment Services Directive - Misplaced Pages Continue

1764-442: Was to improve the efficiency of cross-border payments and turn the previously fragmented national markets for euro payments into a single domestic one. SEPA would enable customers to make cashless euro payments to any account located anywhere in the area, using a single bank account and a single set of payment instruments. People who have a bank account in a eurozone country can use it to receive salaries and make payments all over

#203796