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THE ABC OF SEPA REGULATION.
 
Sepa is the acronym for "Single Euro Payments Area", i.e. a single area for payments in euros. The objective is to set up credit transfers and direct debit orders in a simple and fast way, as currently happens at the national level.
 
The countries adhering to SEPA are 41.
They are: 
 
         
  • the member states of the European Union (EU): Andorra, Austria, Belgium, Bulgaria, Cyprus, Croatia, Denmark, Estonia, Finland (including the Åland Islands), France (including French Guiana, Guadeloupe, Martinique, Mayotte, Saint Barthélemy, Saint Martin - French subdivision, Réunion and Saint Pierre and Miquelon), Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal (including the Azores and Madeira islands), Czech Republic, Romania, Slovakia, Slovenia, Spain (including the Canary Islands, Ceuta and Melilla), Sweden and Hungary;
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  • the countries adhering to the European Economic Area (EEA): Iceland, Norway and Liechtenstein
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  • the non-EEA countries to which the geographical scope has been extended: Albania, Moldova, Monaco, Montenegro, North Macedonia, United Kingdom (including Gibraltar, Guernsey, Jersey, and Isle of Man), San Marino, Switzerland and Serbia.
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EU Regulation no. 260/2012 (so-called SEPA End Date Regulation) set 1 February 2014 (the so-called “SEPA end-date”) as the final deadline for the migration of domestic payment instruments to the corresponding SEPA instruments.
 
Here are the products that have changed for private customers:
 1. Credit transfers; 
 2. Utilities and RID; 
 3. RID transferability. 
 
1. CREDIT TRANSFERS
 
The euro credit transfer within the SEPA Area has been replaced by the new basic payment instrument: the SEPA Credit Transfer (SCT).
 
The transition did not entail substantial changes, but only formal variations: 
 
         
  • The CRO has become the Transaction ID, the new transaction reference (on statements it is called REF.);
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  • The length of the payment reference has been limited to 140 characters;
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  • It is no longer possible to set a value date prior to the transaction;
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  • It is not possible to set a value date for the beneficiary, but only the execution date of the transaction for the originator.
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The economic conditions for credit transfers have remained unchanged and no additional data have been required from the debtor-customer beyond the “standard” ones.
 
2. UTILITIES AND SDD
 
The RID debit has become SDD, SEPA Direct Debit.

 SDD is nothing more than a payment instruction in Euro initiated by the creditor (creditor company) on the basis of a mandate signed by the debtor and can be used both for recurring payments, for example those commonly known as “utilities”, and for one-off payments.

 Please note that the SDD debit is pre-authorized and that the bank, unless otherwise indicated by the debtor, will proceed with the debit automatically.

 The reversal of the transaction can be carried out within the following timeframes: 
 
         
  • 8 weeks from the debit date, in the case of an authorized transaction, with a valid mandate;
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  • 13 months from the debit date, in the case of an unauthorized transaction, with a no longer valid or non-existent mandate.
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What happens for:
 
         
  • New SDD direct debits requested via Internet Banking or branch
     To set up a new payment on a current account, it will be necessary to submit an additional document: the mandate. This document will be required whether the direct debit request is made via Internet Banking or through a branch. The mandate, signed with the creditor company, contains the essential data for setting up the new SDD.
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  • New SDD direct debits requested via the creditor company:
     New direct debit requests can also be activated directly by the creditor company, authorized by the customer through the signing of the mandate.
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In summary:
 
             
  • The customer signs the mandate provided by the creditor company;
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  • The customer submits the signed mandate to their reference branch or via Internet Banking;
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  • The creditor company initiates the debit request;
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  • The bank performs the automatic debit on the customer’s current account.
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It should be noted that, for the cases described above, the economic conditions will remain unchanged compared to those currently in place.
     
3. SDD TRANSFERABILITY
     
The customer who wishes to transfer SDDs from one bank to another may do so only by going to the branch with all the mandates of the SDDs domiciled with the other institution and requesting from the new bank the procedures for setting up and verifying the new direct debit.
     
Glossary
     
Sepa: Single Euro Payments Area - Single area for payments in Euro;
  RID: Automatic debits on current account, recurring and non-recurring (utilities, subscriptions, installments);
  SDD: SEPA Direct Debit - SEPA direct debit
  SCT: SEPA Credit Transfer - SEPA credit transfer;
 Creditor company/Creditor: company holding a right of credit - in this case, the entity providing a service paid via RID/SDD;
  Debtor/Customer: the person who has the obligation to pay the creditor for the service provided;
  Mandate: document by which the debtor authorizes the creditor to initiate one or more debits on their current account;
 
     
WITHIN SEPA SCOPE
     
             
  • Domestic credit transfers (including over-the-counter transfers where funds are provided in cash by the payer to the Bank);
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  • Domestic direct debits (RID).
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OUTSIDE SEPA SCOPE
     
             
  • Bank Receipts (Ri.Ba.);
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  • MAV;
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  • RAV;
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  • Bank and postal payment slips;
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DEROGATIONS AND SEPA
     
For financial RID (linked to financial instruments / investment transactions) and fixed-amount RDI, considered niche products, the END DATE has been postponed to 1/2/2016.
     
SEPA instruments are based on the new European UNIFI ISO-20022 XML standards, which replace the format of the files previously used at the national level. The use of common standards will allow companies to manage more efficiently not only collection and payment instructions but also the related reporting and, with it, the reconciliation of accounting and commercial flows.
     
The use of this standard has been mandatory between banks since 1 February 2014. To meet the needs of companies in the transition to SEPA, the Bank of Italy has provided them with the possibility to derogate from the obligation to use the XML format until 1 February 2016. Companies may in any case use the XML format even before 1 February 2016.
     
The derogation on the use of XML messaging will therefore allow companies, starting from 1 February 2014, to choose between:
     
             
  • Use of SEPA-compliant SCT and SDD functions (XML format);
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  • Use of credit transfer and RID functions appropriately modified by the CBI Consortium for settlement in XML.
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