Fabian Demicoli

Single European Payments Area : A Brief overview

 The Single Euro Payments Area represents the next major step towards closer European integration. SEPA is set to allow customers to make non-cash euro payments to any beneficiary located anywhere in the euro area using a single bank account and a single set of payment instruments. There will no longer be any differentiation between national and cross border payments within the euro area.

The project is essentially being run by the banking industry, the implementation of SEPA however is being undertaken by European banking communities and all other stakeholders. The European Central Bank (ECB) and the European Commission (EC) strongly support SEPA and with the EPC share a joint vision for the SEPA project.

With the adoption of the Euro as from 1 January 2008, the Maltese banking community acknowledged the importance to migrate to SEPA. The SEPA National Implementation Plan presents an overview of the Maltese National Community Organisational Structure and its commitment towards SEPA. The Malta Bankers' Association (MBA), which represents the local banking community is responsible for coordinating, monitoring the progress of, and the migration of SEPA at the national level.

The SEPA programme is all about harmonising millions of consumer 'retail' payments. As a result, there will be a number of changes to frequently used payment instruments in order to provide SEPA-wide standardised instruments.

As from 28 January 2008, the Maltese banking community can process incoming SEPA Credit Transfers and is committed to offer payment services users access to SEPA Credit Transfer (SCT) to be used within the SEPA area. Following the transposition of the Payments Services Directive into national law as from November 2009 in the euro-area, SEPA Direct Debits (SDD) will be supported and will open up the possibility of using a direct debit instrument in the SEPA area and Malta.

In a consultation exercise carried out in 2008 by the CBM on the retail payment services policy and the Payment Services Directive, broad support for the approach proposed by the Central Bank of Malta, in respect of the repositioning of cash and cheques and the regulatory framework applicable to cheques and other payment instruments was received. Respondents indicated strong support for a harmonised implementation of the Payment Services Directive, and encouraged regulators to work towards harmonised implementation across the EU in order to avoid inconsistencies. From the various concrete initiatives to promote value added services it was clear that regulatory review and robust market/regulator coordination will be needed to deliver many of the strongest potential advantages of SEPA and the PSD. Stakeholders broadly shared the Central Bank's view that developments are such that the present traditional methods of processing and executing retail customer's payments need to be changed. In particular, along with the Central Bank, stakeholders hope to see SEPA become a success leading to substantial development in e-payment, m-payment, e-invoicing, and e-reconciliation.

The launch of the SEPA Direct Debits, which will bring the project much closer to citizens' and businesses' everyday concerns, has been postponed until November 2009 in line with a number of other European countries as well as the legislation of the Payments Services Directive within the different countries. It has been acknowledged that this is going to be a very difficult task to manage the migration to full SEPA Direct Debits over a 14 month period.

Discussions with stakeholders remain important to gather the views of various sectors of society to ensure a good take up of the benefits brought by SEPA. Any comments should be directed to Abigail Mamo on 21232881/3 or

Source: MEUSAC ECOFIN Sectoral Committee.

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