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1. What is SEPA and what is its purpose?
SEPA is an acronym for Single Euro Payments Area. The European Commission’s objective is to establish a single market for payment transactions in the European Economic Area. Payment transactions in this SEPA area will be no different to domestic payments, as payment transactions will be carried out according to the same terms and conditions, standards and prices as domestic payments.
2. What services will be affected by SEPA?
The first phase will include credit transfers, direct debit and payment cards. Later on SEPA will cover payment transaction services more broadly.
3. When will SEPA services be introduced?
SEPA services will be introduced in phases starting in 2008 and, after a transitional period, they will replace the existing domestic payment transaction services. The transitional period will last until the end of 2010 for credit transfers. A transitional period has not yet been set for direct debit, and the transitional schedule for payment cards is decided individually by each bank.
4. How will SEPA affect customers sending payment data (LM02, LM03, PELL, LUM)?
After the transitional period domestic payments will be carried out as SEPA credit transfers. Customers sending payment data to a bank must note that SEPA credit transfer data is sent to the bank in the form of the new C2B XML standard. It will be possible to send payment data to the bank in the form of the domestic payment data standard as well as the new C2B XML data standard until the end of 2010. After 2010 only the new standard will be used. However, even after 2010 the option of sending data to the bank in the form of the old standard will be provided as an additional service for a period of 10 months.
5. How will SEPA affect account numbers?
Account numbers in the domestic format will be discontinued and in future will be notified in the International Bank Account Number (IBAN) format.
6. How will SEPA affect direct debits?
The existing Finnish direct debit service will be discontinued in a few years’ time. However, SEPA direct debit significantly differs from Finland’s current direct debit service and the aim is to replace direct debit in Finland with e-invoices.
7. How will SEPA affect payment cards?
SEPA’s objective is to enable cardholders to use their payment cards in Finland and abroad, at least in the Single Euro Payments Area. Therefore domestic bank cards are being replaced with debit cards that are tied to a bank account. Sampo Bank is offering the Debit MasterCard, which is accepted as a payment method all over the world. Sampo Bank will contact its customers and provide assistance in changing the card well in advance before the time comes to replace it with a debit card. Sampo Bank already has several SEPA-compatible cards. In addition to the Debit MasterCard, these cards include all Visa and MasterCard cards and Visa Electron cards.
Companies accepting card payments must ensure that they have a payment terminal that accepts chip cards and that the terminal has been updated to accept international payment cards. Further information on payment terminals for chip cards is provided by payment terminal and cash register system providers.
8. How can a company/entity prepare for SEPA?
Preparations will depend on the company/entity’s systems and the automation level of its payments processing. The changes will be slight if the company/entity does not use batch data for making payments but instead uses only online banking to make payments individually. However, all companies/entities will have to convert their own and their trade partners’ bank contact details to the IBAN format in their systems, as account numbers in the domestic format will be discontinued. The IBAN and BIC formats should be added to invoice forms by 1 July 2010. Companies/entities making payments with batch data should contact their financial management software providers and assess the impact of SEPA on the company/entity’s various systems. Companies/entities accepting card payments must ensure that they have a payment terminal that accepts chip cards and that the payment terminal has been updated to accept the new international payment cards. Companies/entities accepting direct debit payments should ultimately consider transferring to e-invoicing.
9. How will companies/entities benefit from SEPA?
Companies/entities operating internationally have already been able to benefit from the low cost of EU and SEPA payments for a number of years, but once the Payment Services Act enters into force, payment transactions in the euro zone will be processed more quickly and value date practices will change to the benefit of companies/entities. SEPA also introduces the possibility of more extensive competitive tendering for payment transaction services by standardising payments and payment processes in different countries. SEPA will also make it easier for companies/entities to centralise their payments with one bank and reduce their number of foreign bank accounts.
10. How will SEPA affect personal customers?
Private individuals making payments within the euro zone will benefit from the low cost of payments and faster processing. Invoices will be paid using the IBAN and some invoicing parties have already added their IBAN to their invoices alongside their Finnish account number. Our personal customers are already able to use the IBAN when paying domestic invoices. Other changes include having to remember your account number in the IBAN format and being able to use all payment cards all over the world. Sampo Bank will contact its customers and assist them in changing their card if they have a domestic bank card. |