Single Euro Payment Area scheme was designed to dilute market fluctuations in terms of euro payment within Europe. This scheme which is valid throughout Europe is aimed at creating a standardized platform for all consumers and commercial enterprises when it comes to transferring funds or making payments within cross border countries. First introduced in 2008, SEPA scheme has proved to be efficient machinery to connect all fragmented euro market into a single domestic unit. Going by the records the EU or the European Union at a conference held at Berlin has proposed that SEPA should replace the existing Direct Debit norms that operate at the national level in United Kingdom. As of February next year that is 2014, all countries within Europe, alongside the 5 ESU countries will implement SEPA as ‘the’ direct debit scheme to be followed when undergoing or initiating transactions.
This article will provide a general overview on all the important SEPA features and SEPA direct debit collections.
• One of the coolest things about this scheme is that a creditor or a debtor can process their transactions, make or collect payments from any Euro account. This feature was laid down by one of the key SEPA input that aimed to make the system a unique and singular way of collecting funds from euro accounts.
• Any accounts that can be accessed by a national Direct debit collection plan stands eligible for SEPA direct debit collection. The accounts that make for an exception when it comes to SEPA direct debit collection are the savings accounts. These accounts are not accessible by SEPA direct debit.
• As per future plans SEPA direct debit can also be collected from non-euro accounts. But as of yet this type of allowance is solely dependent on the discretion of the banks with which the creditor or the debtor holds an account.
• At present the SEPA scheme has not been given absolute power when it comes to collect payments in euro market. As of yet it functions alongside national direct debit schemes. But from 2014 SEPA will be put into effect in place of the existing norms. February 1st 2014 has been transpired as the end date of migration of national schemes to SEPA direct debit. As after this date all national schemes related to direct debit will be put into void and euro collection will be routed via SEPA.
• October 31st 2016 will be the last date for migration as also including UK direct debit schemes. All national debit plans will be turned off after this date.
All prerequisites to changing from national direct debit to SEPA direct debit collection will vary from one region to another. But it is clear that almost all countries require working out on schemes that will put forth SEPA as a merchant friendly device when handling large volumes of business transactions.
About the Author: Ali Moiyed a commerce student at a UK university. SEPA direct debit collections or SEPA direct debit transfer is going to be the most revolutionary projects in the banking sector all over the world. But the implementation process is going to be quite challenging.