The Single European Payments Area (SEPA) – an initiative by European banks to harmonise transactions within the EU – will officially launch next Monday, 28 January with a speech by, among others, Charlie McCreevy, the Internal Market and Services Commissioner.
While SEPA aims to make all electronic payments within the euro zone as simple as domestic transactions, including eliminating fees associated with such transactions, the initiative is still only in its early stages.
SEPA itself is a voluntary concept with no European legislation specifying that countries must follow its guidelines.
It will help e-banking as payments that are currently written by cheque for oversees business could be eliminated, says Colm Lyon, managing director of Dublin-based online payment service provider, Realex.
What we are likely to see under SEPA guidelines, not right now but into the future, is that Irish businesses trading within the EU will be able not just to accept credit cards but also debit cards from other countries.
At the moment this cannot be done unless it is arranged with the bank in that specific country but in the future, with SEPA, it is hoped this can all be done by Irish merchants through Irish banks.
SEPA aims for a situation where the cost of a transaction should be the same domestically and in other countries and be moving towards a common system as regards the debit card.
“SEPA’s guidelines will become a catalyst for a significant rise in electronic trade ,” says Lyon.
Another area of interest is online bank transfers, says Lyon, which is likely to become the standard form of payment in the future. If, for example, you go to a website like aerlingus.com it could have the option not only to pay by credit or debit card but also to link directly to your bank account and pay from there.
This is something that is already happening in some European countries, says Lyon, and is a system that Realex would be behind.
“If we could open up the ability for businesses to accept payment directly from a customer’s online bank account, we have taken away the fraud and the risk and this is in line with SEPA ambitions,” says Lyon.
By Marie Boran