SEPA: Single Euro Payments Area

Created by J.P. Morgan Treasury Services


What are the proposed changes of SEPA?

  • SEPA is the area where corporates, consumers and other economic actors may receive and make euro payments within one country and across national borders under standard conditions.
  • SEPA's geographical scope encompasses the 27 European Union (EU) member states, Iceland, Liechtenstein, Norway, Switzerland and Monaco.
  • SEPA is an EU integration initiative in the area of payments to help to achieve the completion of the EU internal market and monetary union.
  • Once SEPA is implemented, all payments will be domestic; there will be no differentiation between national and cross-border euro payments.
  • SEPA is designed to eventually replace national euro payment instruments existing today.
  • Though SEPA was launched in 2008, its adoption has been slow. However, in December 2010, the European Commission announced its proposals for a SEPA end-date that, when passed, will mean the forced migration to SEPA within a legislated timeframe. A single end-date of February 1, 2014, for both credit transfers and direct debits was recently agreed upon and ratified in February 2012.

Who is impacted by SEPA and how?

  • Corporates will be able to simplify their liquidity management through rationalization of account structures and simplification of funding and investment management.
  • Corporates and consumers will have a consistency of charges for their transactions; banking fees and transaction costs will be reduced through consolidation of accounts, which will also help automate and improve reconciliation.
  • SEPA will allow corporates to have one account in one country for most payments, thereby centralizing euro payables and receivables. Corporates will also have the opportunity to manage their payables and receivables within their treasury management systems through a centralized account rather than relying on other banking systems. This will make it easier for them to access their payables and receivables information.
  • The concentration of euro funds into one account should also allow corporates to help avoid complex sweep arrangements.
  • Corporates will have an easier time forecasting their cash flow through more predictable fund inflows and outflows.
  • Consumers can rely on a single set of euro payment instruments, including bank cards, SEPA credit transfers and SEPA direct debits, covering 32 countries.
  • The SEPA Credit Transfer (SCT) Scheme was launched in January 2008. It enables payment service providers to offer credit transfer services.
  • The SEPA Direct Debit Scheme (SDD Core Scheme) and the SEPA Business to Business Direct Debit Scheme (SDD B2B) was launched in November 2009 and created, for the first time, a payment instrument that can be used for both domestic and cross-border collections.
  • SEPA for card establishes a set of common standards to ensure a consistent and secure environment for consumers to make card payments and merchants to receive them. This includes the deployment of EMV® technology and standards to ensure interoperability across the SEPA region.

What can you do?

J.P. Morgan can help you maximize the benefits to your corporation associated with SEPA. We can provide analysis of your current receivables and payables process in order to help you design a SEPA solution based on specific products and your payment profile. This will also help you release any trapped working capital and with one-off investments associated with change. J.P. Morgan can also provide project management support to help your business manage the implementation process.


To learn more about how Chase's solutions can help you,
please contact us or call your Commercial Banker.