Saturday, February 8, 2014

What is SEPA?

Those who have a bank account in the euro-zone received probably since the last half of 2013 several announcements from their bank regarding the changes to take place from 2014, once the introduction of SEPA. 
SEPA stands for the Single Euro Payment Area (SEPA) and is aimed to offer a simplified transfer between euro accounts in the most part of the European area. It includes the 28 EU member countries, plus the 4 EFTA members - Iceland, Norway, Switzerland, Liechtenstein, as well as Monaco and San Marino. 
The process of adjustment and building of the infrastructure started in 2008. With a single bank account used for transactions all over the European space, SEPA aims to turn the payments into domestic currency exchanges, one of the most important objectives of using euro as the main and finally, unique, European currency. The immediate advantage, besides simplicity, is the possibility to reduce the overall costs of transfer that usually used to be expensive. It also encourages inter-country businesses, that used to be deterred by the high costs of transactions.
As in the case of many other big European approaches, communication is key, but some companies, especially in the Eastern part of the continent, may complain that don't have enough information about what SEPA means. But most probably till the end of the year, the majority of European businesses will be fully aware of it, by using it on a regular basis. 

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