WHAT IS SEPA?

Strictly speaking, it is a set of norms which establishes a common system that everyone can use for the transfer of payments between banks in different EU countries.

Up to now, there have been 36 different payments systems in Europe. Imagine how complex and expensive it is to negotiate with these multiple systems if you do business across Europe!

WHAT DO YOU CONSIDER TO BE ITS MAJOR EFFECTS?

It is a major step forward in the construction of an integrated European market – and I’m not being too pompous in saying that. If you look at the European market we have spent a lot of time and energy in the creation of an internal market for the movement of goods and capital. Achieving this without a common payment system is an illusion. SEPA will provide the conditions for that.

WHEN WILL IT BE IMPLEMENTED?

On 28 January 2008, the system will go live. From that date, you will be able to send SEPA payments from bank to bank across Europe. It won’t all happen overnight, but in 31 countries [the EU-27 plus Norway, Iceland, Liechtenstein and Switzerland] the system will be in place to start moving money. As SEPA transactions become the norm, banks will start to phase out the legacy systems, so the transition will be gradual.