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With the introduction of euro as the common currency, citizens have been able to make cash payments anywhere in the euro area as easily as when they used their national currency at home. However, the adoption of the euro did not have the same effect to cashless payments within the European market. Each country had its own technical standards and individual payment procedures.

SEPA, which is the acronym of the English words "Single Euro Payments Area", is an initiative of the European Banking industry. SEPA will be the area where citizens, companies and other economic factors will be able to make and receive payments in euro under the same basic conditions, rights and obligations, regardless of their location. Under SEPA, users of payment services will be able to make payments in euro using a single set of payment instruments (SEPA credit transfers, SEPA direct debits and SEPA card payments) as easily, smoothly and safely as they can with national payment instruments today.

With SEPA, these traditional structures are dismantled and a common language has been created. All banks will use common procedures and standards so that each customer will be able to carry out bank credit transfers, direct debits and card payments in a uniform manner throughout Europe. This harmonization will allow bank customers to settle all of their payment transactions in euro via any bank within the euro area.

Three SEPA Pillars

The SEPA initiative is supported by three major pillars. The political rationale for harmonisation has been championed and driven by the European Commission (EC) in close cooperation with the European Council and European Parliament.

Much as with the euro introduction, SEPA's high level requirements and implementation timelines have been defined and set by the Governing Council of the European Central Bank (ECB).

Design and specification are the responsibility of the European Payments Council (EPC), as well as the monitoring of implementations and migration.