ABBL
Association des Banques et Banquiers, Luxembourg
The Luxembourg Bankers' Association
Luxemburger Bankenvereinigung
What is SEPA ?
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SEPA stands for Single Euro Payments Area. The idea behind the project is to have a single space within Europe where citizens, companies and other economic actors will be able to make and receive payments in euro, whether within or outside national borders, under the same basic conditions, rights and obligations, regardless of their location. Thus, there will no longer be a difference between national and intra-European cross-border payments: all payments in euro will essentially be domestic. Geographically, SEPA is not limited to the euro area, but includes all of the European Economic Area (the 27 EU member states, Iceland, Liechtenstein, Norway) and Switzerland.
The major stakeholders
At the European level, implementation of the SEPA project works on a three-pillar basis. Via the Payment Services Directive (PSD), the European Commission has established the legal framework for the implementation of SEPA. Member states have to transpose the PSD into national legislation by 1 November 2009. The European Central Bank (ECB) is responsible for monitoring the implementation and design of SEPA, and actively promotes the harmonisation of payments in Europe. Finally, the European Payments Council (EPC) defines business rules, standards and policies.
At national level, governments, central banks and banking associations take care of the design and executions, as well as of the implementation of and migration to SEPA.
In Luxembourg, the ABBL acts as National Adherence Support Organisation (NASO). As NASO, the ABBL supports banks in Luxembourg in their migration towards SEPA compliant payment systems. The ABBL has also developed the Luxembourg Interbank SEPA Agreement (LUISA). Members of the Luxembourg banking community have signed this agreement, which formally lays down the commitment of participating banks or institutions to actively support and implement SEPA services. The ABBL also officially represents the Luxembourg banking community at the European Payments Council (EPC).
SEPA Payment Instruments
Besides Cash, SEPA covers three main types of payment instruments:
These new SEPA payments will replace the existing national payment instruments after a transition period during which new SEPA services will co-exist with current instruments.
The SEPA Credit Transfer scheme defines the common norms that apply for credit transfers. It thus defines the message format used between banks (SWIFT messages using XML), standard codes identifying beneficiary and bank (IBAN and BIC) and all the information that a given message must contain. As a matter of fact, Luxembourg customers have been using IBAN and BIC codes ever since 2002. On 28 January 2008, SEPA Credit Transfer was the first SEPA compliant service to be launched.
The SEPA Direct debit scheme foresees the use of the same message formats and encoding standards as those used for credit transfers. Importantly, the debtor now directly mandates the creditor to debit their account, rather than having to give this mandate to their (the debtor's) bank, as was the case in Luxembourg until now.
As far as SEPA Cards are concerned, they will function similarly to the debit cards that already exist at national level, except that they can be used for payment in the whole of the SEPA space at the same conditions as in the cardholder's home country.
Norms and standards
SEPA is a European project that uses a certain number of technical norms and standards principally based on ISO norms.
Interbank transfers that take place as part of credit transfer and direct debit operations are executed via messages in the XML format, which is based on the ISO20022 standard and, more precisely, on the UNIFI norm (UNIversal Financial Industry).
The UNIFI norm aims to standardise, from end to end, the life cycle of payments and of clearing and settlement for financial markets. These standards cover the entire message flow with regards to payment initiation, rejection, return and reimbursement.
They are applicable in the interbank domain.
In the context of SEPA, the EPC recommends that banks promote these same standards in the field of C2B (Customer to Bank).
Interbank domain:
XML ISO20022 structure of messages and flows during a Bank to Bank (B2B) credit transfer or direct debit.
C2B domain:
The norm below is not obligatory in the field of C2B and it is up to each banking community to appraise it use.
XML ISO20022 structure of messages and flows during a Customer to Bank (C2B) credit transfer or direct debit.
The other domain of standardisation concerns the structuring of bank account numbers according to the IBAN format.
Luxembourg already adopted IBAN in 2002, contrary to a number of other countries for whom the adoption of the IBAN format is one of the stumbling blocks in the migration towards SEPA.
IBAN:
- ISO13616 definition norm of the IBAN format
- Definition of the format of IBAN account numbers in Luxembourg
The payment cards domain has adopted the EMV norm as a minimum standard. Details on this format are available here.
SEPA Credit Transfer Scheme
4458 banks have now adhered to the SCT Scheme which went live on 28 January 2008.
The SEPA Credit Transfer Scheme enables payment service providers to offer a core and basic credit transfer service throughout SEPA, whether for single or bulk payments. The scheme's standards facilitate payment initiation, processing and reconciliation based on straight-through-processing (STP). The scope is limited to payments in euro within SEPA countries. The credit institutions executing the credit transfer must be scheme participants; that is, both must have formally adhered to the SEPA Credit Transfer Scheme. There is no cap on the amount of a payment carried out under the scheme.
The SEPA Credit Transfer Scheme Rulebook and the accompanying Implementation Guidelines are the definitive sources of information regarding the rules and obligations of the Scheme. In addition, a document entitled "Shortcut to the SEPA Credit Transfer Scheme" is available which provides basic information on the characteristics and benefits of the SCT Scheme (see below)
SEPA Direct Debit Scheme
2831 Banks have now adhered to the SDD Core Scheme which went live on 2 November 2009
The SEPA Direct Debit Schemes create, for the first time, a payment instrument that can be used for both national and cross-border euro direct debits throughout the SEPA area.
In November 2009, the EPC successfully launched the SEPA Core Direct Debit Scheme and the SEPA Business to Business Direct Debit Scheme. As of this date, banks throughout SEPA are gradually starting to deliver SEPA Direct Debit services to their customers. All branches of banks in the euro area must be reachable for SEPA Core Direct Debit by 1 November 2010 as mandated by the EU Regulation on cross-border payments in the Community. On the launch date, 2607 banks representing about 70 per cent of SEPA payment volumes signed up to the new schemes; of those, 2366 banks offered both SDD Core and SDD B2B services.
The SDD Core Scheme in a Nutshell
The SEPA Core Direct Debit Scheme - like any other direct debit scheme - is based on the following concept: "I request money from someone else, with their pre-approval, and credit it to myself".
The SEPA Core Direct Debit Scheme applies to transactions in euro. The debtor and creditor must each hold an account with a credit institution located within SEPA. The payment service providers executing the direct debit transaction must be scheme participants; that is, both must have formally adhered to the SEPA Direct Debit Scheme. The Scheme may be used for single (one-off) or recurrent direct debit collections; the amounts are not limited.
The SEPA Business to Business Direct Debit Scheme
The SEPA Business to Business Direct Debit Scheme (B2B) serves as the basis for the development of specific direct debit products and services that allow business customers in the role of debtors (payers) to make payments by direct debit as part of their business transactions.
The most important differences between the SEPA Core Direct Debit Scheme and the SEPA Business to Business Direct Debit Scheme are:
• In the B2B Scheme the debtor is not entitled to obtain a refund of an authorised transaction.
• The B2B Scheme requires debtor banks to ensure that the collection is authorised by checking the collection against mandate information; debtor banks and debtors are required to agree on the verification to be performed for each direct debit.
• A debtor bank cannot offer the B2B Scheme to a debtor who is a "consumer" under the law of the country where that debtor bank is providing the payment services.
• Responding to the specific needs of the business community, the B2B Scheme offers a significantly shorter timeline for presenting direct debits and reduces the return period.
SEPA Cash
The introduction of euro bank notes and coins in January 2002 was a successful operation and one step towards increased European financial integration. Consumers continue to have a great affection for cash because it is real, instantaneous and apparantly free.
However, cash payments are costly for society: In 2008, the total cost of distributing, managing, handling, processing and recycling cash and of accepting cash payments was €84 billion; equivalent to 0.60% of Europe's GDP or €130 per person.*
Various players in the payments market are therefore pondering means to incentivise increased use of electronic payment instruments, while reducing the costs of wholesale cash distribution.
Single Euro Cash Area (SECA)
The current landscape for the distribution of cash is characterised by multiple national infrastructures each organised at a national level and based on different business models. This lack of harmonisation, common approach and best practice increases the cost of cash processing and creates many inefficiencies across the euro zone. For retail cash, banks, merchants, public authorities and transport organisations are all finding it difficult to handle any additional volume of cash.
Given this background, the EPC believes that actions by all stakeholders within the euro area could contribute to reduce the high cost of processing and handling cash. To this end, it has been agreed to create the Single Euro Cash Area (SECA).
The plans for the SECA have been developed in close consultation with the Eurosystem Banknote Committee, banks and other key players. The objective of SECA is to create, with the Eurosytem, a level playing field whereby the basic cash functions performed by each of the National Central Banks (NCBs) in the euro area are interchangeable, e.g. there is a common level of service and common processes are followed by all euro area NCBs.
SECA will support one major goal of the SEPA initiative: encouraging consumers and merchants to migrate from cash to payment cards and other electronic payment instruments.
Improving Cash Processing
In addition, the EPC developed recommendations with a view to creating a common euro-wide infrastructure for wholesale cash based on the following principles:
• The development of common security requirements for euro note transportation, including standards for bank note neutralisation systems.
• The identification of best practice standards for coin and banknote packaging including bundle types (content, single or multiple denomination countries, packaging and procedures for returning counterfeits and stained banknotes).
These standards should also include harmonisation of processes across national markets and banknote standard packages compatible with cash degradation systems.
SEPA Cards
The aim of creating a SEPA for Cards is to enable European customers (card-holders and merchants) to use general purpose cards to make and receive payments and withdraw cash in euro throughout the SEPA area with the same ease and convenience as they do in their home country.
European consumers should benefit from a wider acceptance of their cards within SEPA and more choice of card products than before.
European merchants should benefit from a more competitive acquiring market, and be able to choose which card schemes to accept and from which acquirer.
Reference Documents
SEPA Migration Consultation (Juillet 2010) - Comments
Working Paper on SEPA Migration End-Date (Juin 2010)
Présentations sur les derniers développements de SEPA (Mai 2010)
SEPA Migration End Date Discussion Paper (Mars 2010)
Rapport d'avancement 2009 (Décembre 2009)
Luxembourg banks having adhered to the SEPA Credit Transfer
| Bank | BIC Code | Readiness Date |
| ABN AMRO (Luxembourg) SA | ABNALU2AXXX | 28/01/2008 |
| BANCA POPOLARE DELL'EMILIA ROMAGNA (EUROPE) INTERNATIONAL S.A. | BPMOLULSXXX | 28/01/2008 |
| BANCO ITAU EUROPA LUXEMBOURG S.A. | ITAULULLXXX | 07/12/2009 |
| BANK OF CHINA LIMITED, Luxembourg Branch | BKCHLULLXXX | 03/11/2008 |
| BANQUE BCP S.A. LUXEMBOURG | BMECLULLXXX | 28/01/2008 |
| Banque Carnegie Luxembourg S.A. | CARNLULLXXX | 07/04/2008 |
| BANQUE DE LUXEMBOURG S.A. | BLUXLULLXXX | 28/01/2008 |
| BANQUE DELEN LUXEMBOURG | DELELULLXXX | 28/01/2008 |
| BANQUE ET CAISSE D'EPARGNE DE L'ETAT LUXEMBOURG | BCEELULLXXX | 28/01/2008 |
| BANQUE HAVILLAND S.A. | HAVLLULLXXX | 06/02/2012 |
| BANQUE LBLUX S.A. | BYLALULLXXX | 28/01/2008 |
| BANQUE PRIVEE EDMOND DE ROTHSCHILD EUROPE | PRIBLULLXXX | 28/01/2008 |
| Banque Raiffeisen S.C. | CCRALULLXXX | 01/06/2009 |
| BGL BNP Paribas | BGLLLULLXXX | 28/01/2008 |
| BSI LUXEMBOURG S.A. | BSILLULXXXX | 09/08/2010 |
| CACEIS Bank Luxembourg | BSUILULLXXX | 03/03/2008 |
| COMMERZBANK INTERNATIONAL S.A. | COBALULXXXX | 28/01/2008 |
| Compagnie de Banque Privee SA | CBPXLULLXXX | 05/05/2008 |
| CREDEM INTERNATIONAL (LUX) S.A. | CRDMLULLXXX | 28/01/2008 |
| CREDIT AGRICOLE LUXEMBOURG | AGRILULAXXX | 28/01/2008 |
| CREDIT SUISSE (LUXEMBOURG) S.A., PRIVATE BANKING | CRESLULLXXX | 28/01/2008 |
| DANSKE BANK INTERNATIONAL S.A. | DABALULLXXX | 08/11/2010 |
| DEUTSCHE BANK LUXEMBOURG S.A. | DEUTLULLXXX | 28/01/2008 |
| Deutsche Postbank International S.A. | PBNKLULLXXX | 06/10/2008 |
| DEXIA BANQUE INTERNATIONALE A LUXEMBOURG S.A. | BILLLULLXXX | 28/01/2008 |
| DEXIA LDG BANQUE S.A. | DXIALULLXXX | 28/01/2008 |
| DZ BANK INTERNATIONAL S.A. | GENOLULLXXX | 28/01/2008 |
| EAST-WEST UNITED BANK S.A. | EWUBLULLXXX | 12/04/2010 |
| EFG PRIVATE BANK (LUXEMBOURG) S.A. | EFGBLULLXXX | 28/01/2008 |
| ENTREPRISE DES POSTES ET TELECOMMUNICATIONS LUXEMBOURG | CCPLLULLXXX | 28/01/2008 |
| FORTUNA BANQUE S.C. | FOTNLUL1XXX | 06/02/2012 |
| HAUCK UND AUFHAEUSER BANQUIERS LUXEMBOURG S.A. | HAUKLULLXXX | 28/01/2008 |
| HSBC PRIVATE BANK (LUXEMBOURG) S.A. | BLICLULXXXX | 03/03/2008 |
| HSBC Trinkaus & Burkhardt (International) S.A., | TUBDLULLXXX | 28/01/2008 |
| HSH NORDBANK PRIVATE BANKING S.A. | NOBPLULLXXX | 28/01/2008 |
| HSH NORDBANK SECURITIES S.A. | HSHNLULLXXX | 28/01/2008 |
| ING Luxembourg S.A. | CELLLULLXXX | 28/01/2008 |
| KBL European Private Bankers S.A. | KBLXLULLXXX | 28/01/2008 |
| LA FRANCAISE AM PRIVATE BANK | NEPBLULLXXX | 02/06/2008 |
| Nikko Bank (Luxembourg) S.A. | NIKOLULLXXX | 03/11/2008 |
| Norddeutsche Landesbank Luxembourg S.A. | NOLALULLXXX | 02/11/2009 |
| Pictet et Cie (Europe) S.A. | PICTLULXXXX | 02/06/2008 |
| RBS Global Banking (Luxembourg) SA | ABNALULLXXX | 12/02/2010 |
| SAL. OPPENHEIM JR. & CIE. S.C.A. | SOPPLULXXXX | 28/01/2008 |
| SKANDINAVISKA ENSKILDA BANKEN S.A. | ESSELULLXXX | 28/01/2008 |
| SOCIETE EUROPEENNE DE BANQUE S.A. | SEBKLULLXXX | 28/01/2008 |
| SOCIETE GENERALE BANK AND TRUST S.A. | SGABLULLXXX | 28/01/2008 |
| SVENSKA HANDELSBANKEN S.A. | HANDLULLXXX | 28/01/2008 |
| SWEDBANK S.A. | BNELLULLXXX | 28/01/2008 |
| UBI Banca International S.A. | CABILULLXXX | 05/07/2010 |
| UBS LUXEMBOURG S.A. | UBSWLULLXXX | 28/01/2008 |
| UNICREDIT INTERNATIONAL BANK (LUXEMBOURG) S.A. | UNCRLULLXXX | 28/01/2008 |
| Van Lanschot Bankiers (Luxembourg) S.A. | FVLBLULLXXX | 28/01/2008 |
| VP BANK LUXEMBOURG S.A. | VPBVLULLXXX | 13/01/2012 |
Last update: 09/03/2012
Luxembourg banks having adhered to the Core SEPA Direct Debit
| Bank | BIC Code | Readiness Date |
| ANDBANC LUXEMBOURG S.A. | BACALULLXXX | 05/03/2012 |
| BANQUE BCP S.A. LUXEMBOURG | BMECLULLXXX | 01/11/2010 |
| BANQUE DE LUXEMBOURG S.A. | BLUXLULLXXX | 02/11/2010 |
| BANQUE ET CAISSE D'EPARGNE DE L'ETAT LUXEMBOURG | BCEELULLXXX | 01/11/2010 |
| Banque Raiffeisen S.C. | CCRALULLXXX | 01/11/2010 |
| BGL BNP Paribas | BGLLLULLXXX | 02/11/2009 |
| DEKABANK DEUTSCHE GIROZENTRALE LUXEMBOURG S.A. | DGZFLULIXXX | 08/02/2010 |
| DEXIA BANQUE INTERNATIONALE A LUXEMBOURG S.A. | BILLLULLXXX | 01/03/2010 |
| ENTREPRISE DES POSTES ET TELECOMMUNICATIONS LUXEMBOURG | CCPLLULLXXX | 01/11/2010 |
| FORTUNA BANQUE S.C. | FOTNLUL1XXX | 01/11/2010 |
| ING Luxembourg S.A. | CELLLULLXXX | 01/02/2010 |
| KBL European Private Bankers S.A. | KBLXLULLXXX | 01/11/2010 |
| Pictet et Cie (Europe) S.A. | PICTLULXXXX | 07/02/2011 |
| RBS Global Banking (Luxembourg) SA | ABNALULLXXX | 12/02/2010 |
| SOCIETE EUROPEENNE DE BANQUE S.A. | SEBKLULLXXX | 02/11/2009 |
| SOCIETE GENERALE BANK AND TRUST S.A. | SGABLULLXXX | 01/11/2010 |
| UBI Banca International S.A. | CABILULLXXX | 02/11/2009 |
Last update: 09/03/2012
Luxembourg banks having adhered to the B2B SEPA Direct Debit
| Bank | BIC Code | Readiness Date |
| BANQUE ET CAISSE D'EPARGNE DE L'ETAT LUXEMBOURG | BCEELULLXXX | 01/11/2010 |
| BGL BNP Paribas | BGLLLULLXXX | 04/07/2011 |
| DEKABANK DEUTSCHE GIROZENTRALE LUXEMBOURG S.A. | DGZFLULIXXX | 08/02/2010 |
| DEXIA BANQUE INTERNATIONALE A LUXEMBOURG S.A. | BILLLULLXXX | 01/04/2012 |
| ENTREPRISE DES POSTES ET TELECOMMUNICATIONS LUXEMBOURG | CCPLLULLXXX | 01/11/2010 |
| ING Luxembourg S.A. | CELLLULLXXX | 01/02/2010 |
| KBL European Private Bankers S.A. | KBLXLULLXXX | 01/11/2010 |
| RBS Global Banking (Luxembourg) SA | ABNALULLXXX | 01/11/2010 |
| SOCIETE EUROPEENNE DE BANQUE S.A. | SEBKLULLXXX | 01/11/2010 |
| UBI Banca International S.A. | CABILULLXXX | 02/11/2009 |
Last update: 09/03/2012
Articles
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14/02/2012
Cross-border bank transfers should become faster, cheaper and safer for EU citizens thanks to "single European payments area" legislation passed by the European Parliament on 14 February 2012. EU-wide rules to ensure that banks compete fairly, eliminate hidden national charges, and accelerate transfers could save up to €123 billion within six years, benefitting clients, banks, and businesses.
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11/01/2012
A secure and transparent integrated payments environment throughout the EU could create more efficient, modern and safer means of payments – for the benefits of consumers, merchants and payment providers.
Based on the Green Paper consultation adopted on 11 January 2012, the Commission seeks the views of stakeholders as to which obstacles hinder further market integration and how these could be resolved. -
20/12/2011
The European presidency received on 20 December 2011 the go-ahead to confirm an agreement with the European Parliament on a draft regulation on technical requirements for credit transfers and Direct debit transactions in euros.
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29/11/2011
With its brochure "A single currency - an integrated market infrastructure", the Eurosystem aims to promote a better understanding of its role among all relevant stakeholders and among the public at large.
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17/11/2011
The European Payments Council (EPC) published the SEPA Credit Transfer Rulebook version 6.0, the SEPA Core Direct Debit (SDD Core) Rulebook version 6.0. These updated versions of the rulebooks will take effect on 17 November 2012.
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08/06/2011
The European Payments Council (EPC) and the Cards Stakeholders Group released on 6th June 2011 the latest version of the SEPA Cards Standardisation Volume – Book of Requirements for public consultation. The SEPA Cards Standardisation Volume defines the functional and security standards requirements needed to achieve interoperability based on open and free standards within the Single Euro Payments Area (SEPA) cards market. The EPC and the Cards Stakeholders Group call on industry stakeholders to review the recent revisions and provide feedback by 29 July 2011.
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30/05/2011
The European Payments Council (EPC) has launched on 23 May 2011 the annual public consultation on possible modifications to the SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) Rulebooks.
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09/05/2011
The European Payments Council (EPC), representing the European banking industry in relation to payments, has released the Mobile Contactless SEPA Card Payments Interoperability Implementation Guidelines for public consultation. The EPC calls on the industry to provide feedback by 17 June 2011. The final version of these guidelines is expected to be published in October 2011. The EPC is committed to advancing a sustainable mobile contactless payments ecosystem through the delivery of implementation guidelines that promote an interoperable and flexible architecture.
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13/04/2011
Economic and Monetary Affairs Committee (ECON) held on 13 April 2011 a public hearing on the Single Euro Payments Area (SEPA): Opening the way for the Single Euro Payments Area for Consumers and Enterprises.
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28/03/2011
The EPC homepage has been re-launched with a further refined structure and design. Review site architecture and content based on search engine optimisation (SEO) principles. The content of the EPC website has been aligned with latest EPC communication material approved by the Coordination Committee.
Glossary
The advantages of SEPA
Types of SEPA payments
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