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| Thought Paper |
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Single Euro Payment Area (SEPA) |
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| Abstract |
SEPA is the Single Euro Payment Area being created within the European Union. As part of an on going European Union Harmonisation project EU ministers in early 1990 set out (in regulation) a number of reforms for a Single European Payment Area for domestic cross border payments below E50,000. All payments, transfers, direct debits, etc. must conform to a new set of payment and transfer rules and all payments need to have new Bank Identify Codes (BIC). All funds being transferred will be processed via a new payment system being run by three EU central banks. These new rules will mean that for the first time payments in Euro being cleared within the Euro Zone will be transacted via a single payment centre and will have to confirm to a set of agreed payment rules. Thus, a single level payments playing field has been created. At the same time all transfer charges will have to be advised to the client in advance, so there will be no more hidden charges. This paper dwells on the various aspects of SEPA and its impact on the financial services industry.
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