The Single Euro Payments Area (SEPA) is a European Union (EU) initiative to harmonize payments across the Eurozone.
Goal is to make European payments as easy and cheap as domestic ones by creating a single market for euro-denominated payments.
To achieve this, the European Payments Council (EPC) has created three SEPA payments schemes. Each scheme is a set of interbank “rules, practices and standards” that defines a payment instrument:
Which countries are part of SEPA?
SEPA consists of the 28 EU member states together with the four members of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland). Monaco and San Marino are also part of SEPA.
SEPA Credit Transfer SEPA Credit Transfer (SCT) allows for 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 recipients account within one working day.
SEPA Instant Credit Transfer SEPA Instant Credit Transfer (SCT Inst), also called SEPA Instant Payment,provides for instant crediting of a payees (less than ten seconds, initially, with a maximum of twenty seconds in exceptional circumstances)
SEPA Direct Debit Direct debit functionality is provided by two separate schemes.
The basic scheme, Core SDD, primarily targeted at consumers.
second scheme, B2B SDD, targeted towards business users. It requires a mandate be submitted to the bank by both the creditor and debtor.
SEPA messages names
The first four letters and the three digits of a SEPA Message Name The pain.001 message is used to send credit transfer orders or instructions from a Customer to the Bank. The pacs.008 message is used for the clearing and settlement of credit transfers between financial institutions.
The five last digits of a SEPA Message Name They are used for the versioning of the messages. Pain.001.001.03 means version 1.3 (001.03) of the pain.001 message. When a new version of the message is published, only the last digit is increased. The next version after the Pain.001.001.03 is the Pain.001.001.04
The SEPA Credit Transfer /Direct Debit Initiation message is composed of 3 building blocks:
1.Group Header- This building block is mandatory and present once. It contains elements such as Message Identification, Creation Date and Time.
2. Payment Information -This building block is mandatory and repetitive. Besides elements related to the debit side of the transaction, such as Debtor and Payment Type Information, it contains one or more Transaction Information Blocks.
3. Transaction Information -This building block is mandatory and repetitive. It contains, amongst others, elements related to the credit side of the transaction, such as Creditor and Remittance Information. The number of occurrences of Payment Information Block and Transaction Information Block within a message is indicated by the Grouping field in the Group Header.
SEPA Direct Debit R-Messages