The European Commission and the European Central Bank (ECB) have encouraged the European Payments Council (EPC) to move ahead with the launch of the SEPA Direct Debit scheme. Under this scheme, bank customers would be able to arrange direct debits to pay companies with bank accounts in any of the 31 European countries participating in SEPA (Single Euro Payments Area).

The Commission and the European Central Bank (ECB) recognise the potential advantages of the Single Euro Payments Area (SEPA) Direct Debit scheme, in terms of economies of scale and increased competition liable to drive efficiency and innovation in the area of payments to the benefit of European consumers and companies. The Commission and the ECB have indicated to the European Payments Council (EPC) that they would be prepared to support the idea of a 'multilateral interchange fee' for cross border direct debits within the framework of the SEPA scheme on condition that such fees were objectively justified and transitional (applicable only for a limited period).

In order for SEPA Direct Debit to take off, the right incentives should be in place. In particular, banking communities where an interchange fee for national transactions exists could be allowed to apply this fee as currently exists at national level also for SEPA Direct Debit transactions, but only during a limited and well defined transitional phase. At the end of the transitional phase there would no longer be any transaction-based multilateral interchange fee, neither at the national level, nor at the cross border level, neither for SEPA Direct Debits, nor for national 'legacy' direct debits.

The SEPA Direct Debit scheme is one of the key elements in establishing a single euro payment area, as Internal Market Commissioner, Charlie McCreevy highlighted, also pointing out that “it offers enormous potential for individuals and businesses to manage cross frontier payments on the basis of a single bank account.” He also invited the industry to come forward with their detailed proposals so that the necessary decisions can be taken to launch this important project.

For the ECB Executive Board Member Gertrude Tumpel-Gugerell “it would not be acceptable that bankers are not able to deliver the SEPA Direct Debits by November 2009. A European solution has to be found by the banks which are also agreeable to the competition authorities. But SEPA Direct Debits have to be rolled out in a little more than one year from now. In this respect, the idea of maintaining at national level the same interchange fee for national legacy and SEPA schemes during a limited transitional phase should facilitate the rolling out of the SEPA Direct Debit scheme. This would also ensure the necessary level playing-field in the national context for the SEPA direct debit scheme and the national legacy direct debit schemes”.

The first SEPA payment instruments for credit transfers in euros was officially launched by The European Commission, the European Central Bank and the European Payments Council on January 28th 2008.

Direct debit schemes

Direct debit schemes allow bank customers to give companies or organisations authorisation to take money directly from their bank accounts to pay their bills (e.g. gas, electricity, telephone). Currently there are separate national direct debit schemes and it is not possible to establish direct debit arrangements across frontiers in Europe.