Since the introduction of euro banknotes and coins on January 1, 2002, it has been possible to make cash payments within the eurozone in a common currency with the same ease and simplicity as previous transactions in national currencies.
However, for the introduction of the euro as a single currency to be complete, individuals and businesses also needed to be able to make payments throughout the euro area without using cash. This required a system that would allow payments to be sent and received from a single account anywhere in the area using a unified set of rules and payment standards, ensuring that all operations—both domestic and cross-border—were equally easy, efficient, and secure. To achieve this, the Single Euro Payments Area (SEPA) project was created.
Geographically, the SEPA area includes the 27 European Union (EU) member states, three European Economic Area (EEA) countries—Iceland, Liechtenstein, and Norway—and other non-EEA countries to which the geographical scope has been extended.
SEPA’s goal is not only to improve euro payment processes between countries but also to develop common rules, standards, procedures, and infrastructures. SEPA Credit Transfers were launched in January 2008, followed by SEPA Direct Debits in 2009. Since then, national transfers and direct debits have gradually migrated to SEPA payment services, with the process culminating in 2014.
Another focus of the SEPA project is payment cards. In this case, SEPA aims to eliminate legal, operational, and business barriers to ensure pan-European interoperability—meaning that card usage is not limited by geographic constraints.
One of the main practical drivers of the project has been the European Payments Council (EPC), which acts as the decision-making and coordination body for the European banking industry in this area. The EPC has played a central role in defining new payment schemes and the standards needed to ensure efficiency and security in SEPA payments.
In the card domain, the European Payments Stakeholders Group (EPSG) is actively working in this field. Among its tasks is maintaining and developing the SEPA Cards Standardisation Volume (known as the Volume), which outlines European guidelines for standardization, interoperability, and security.
Additionally, central banks and the European Commission have closely collaborated with other key stakeholders in the initiative, helping to remove technical, legal, and commercial obstacles while supporting SEPA’s overall objectives.
As SEPA implementation has progressed, its governance framework has evolved. In 2010, the SEPA Council was established to ensure effective SEPA implementation across Europe by representing both users and payment service providers.
This body was replaced in December 2013 by the Euro Retail Payments Board (ERPB), which, under the leadership of the European Central Bank (ECB), aims to promote the development of an integrated, innovative, and competitive euro retail payments market in the EU. Its members include representatives of both the supply and demand sides of payment services, as well as the European Commission, the ECB, and national central banks.
To complement the ERPB’s work at the national level, Spain established the National Payments Committee in November 2014 as a market meeting point.
Finally, several key EU regulatory initiatives have been crucial for advancing and consolidating SEPA:
- The Payment Services Directive, transposed into Spanish law by Law 13/2009 on Payment Services, established a uniform set of rules for all payment services in the EU. This directive was replaced by EU Directive 2015/2366 (PSD2), effective since January 2016 and transposed into Spanish law by Royal Decree-Law 19/2018 of November 23 on payment services and other urgent financial measures.
- Regulation (EC) 924/2009 (amended by Regulation 260/2012), which mandates equal fees for domestic and cross-border euro payments, excluding cheques.
- Regulation (EC) 260/2012, which set final migration dates to SEPA payment instruments by establishing technical and business requirements for euro credit transfers and direct debits.
- The EPC decision: “Decision Paper: Brexit and UK PSPs’ participation in SEPA schemes (March 2019).”
- Regulation (EU) 2024/886 of the European Parliament and Council of March 13, 2024, amending Regulations (EU) No. 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 regarding instant euro transfers.
Eurosystem Retail Payments Strategy
The way people pay and receive money in Europe is constantly evolving. The Eurosystem supports an innovative payment ecosystem while ensuring that payment services are secure, reliable, easy, and fast.
Despite all the progress made through SEPA, Europe still lacks a pan-European payment solution for in-store and e-commerce transactions.
Therefore, the Eurosystem has created a retail payments strategy that promotes secure and efficient European payment solutions for society and addresses growing challenges to European sovereignty in the payments domain.
The strategy’s main objectives are:
- to develop pan-European solutions for point-of-interaction (POI) payments managed at the European level,
- to further strengthen SEPA, mainly through the full deployment of instant payments,
- to improve cross-border payments outside the European Union,
- to increase the resilience of retail payments,
- and to support innovation, digitalization, and accessibility in payments.
Instant Credit Transfers
In November 2017, the EPC launched the SEPA Instant Credit Transfer (SCT Inst) scheme.
Its main features include continuous service availability (24 hours a day, 365 days a year) and the speed with which the recipient’s payment service provider (PSP) informs the sender’s PSP of the receipt of funds and, in the case of a successful transaction, makes the funds available to the recipient.
Although usage has increased, the availability of instant payments for payment account holders was not uniform across all EU jurisdictions. The Instant Payments Regulation (IPR) of March 13, 2024, aims to harmonize and accelerate the provision and adoption of instant payments. In the eurozone, all payment service providers must offer instant transfer services if they offer standard transfer services starting October 9, 2025. In non-euro EU countries, the deadline is July 9, 2027, according to the provisions established in the regulation.
The retail payments strategy includes among its objectives the strengthening of the SEPA area, with special attention to the full deployment of instant payments and the development of point-of-sale payment alternatives to international card schemes.