Frequently asked questions about Swedbank and SEPA

What is SEPA?

SEPA is an abbreviation of “Single Euro Payment Area”. The background is a political desire to create an efficient internal trading market within EU by integrating the separate national payment markets that exists today. This has led to the decision of European banks, through self-regulation; fulfil the wishes of the EU Commission and the European Central Bank. In order to do this it is necessary to have a pan-European payment infrastructure, with simple, customer-adapted payment instruments.

What does SEPA mean in practice?

SEPA is the area within which consumers, companies and other actors in the market may pay and be paid, on the same terms, with the same rights and at the same price, as domestic payments, irrespective of where they are located.

It is also a matter of the introduction of a new payments infrastructure in Europe with European clearing houses and the establishment of standards and rules, based on ISO 20022/XML for payments in Euro.

What is the geographical reach of SEPA?

SEPA primarily encompasses the twelve EMU countries, but all other member states of the European Union (EU) and the European Economic Area (EEA) can participate with their euro payments.

Can countries and banks outside the EU and the EEA join as well?

Yes, Swiss banks have already joined, but that it is more of a banking industry requirement as they want to participate in the new payments market. They must comply with the laws and rules and regulations that exist within the EU.

Will all countries be affected by SEPA to the same extent?

The countries with Euro as their national currency (the EMU countries) will migrate their present, internal payment infrastructures into the SEPA. This will be carried out progressively, and will depend on how fast the development of SEPA turns out to be. For countries outside the EMU the local payment infrastructure will not change.

What are the products within SEPA?

Payments - SEPA Credit Transfer
Direct debits - SEPA Direct Debit
Cards - SEPA Card payments

In addition to the core SEPA products, Swedbank is looking into the possibilities of making the payment flow even more efficient by introducing new payment instruments. One example is the Swedbank payment which will be a transfer within Swedbank Group in defined currencies.

What may SEPA mean for you as a consumer?

An individual who, for example, has a summer house in Europe can pay his/her bills directly from his/her home country, and know exactly when the recipient will receive the money. He/She will also know what the total cost will be, both for himself and for the recipient.

Regarding cards, there will be no issuing of national cards from January 2008. All cards that banks offer shall carry a microchip in addition to the magnetic stripe on the card and they shall be possible to use within the entire SEPA area. Swedbank will replace all national cards with international cards which will bring more benefits for you as a customer.

In time, it will also be possible to use a direct debit product, which will simplify payments even more for you as a customer.

What may SEPA mean for your company?

Your company will be able to perform all euro payments centrally. The handling of payments will be easier, and there will be increased opportunitites to automate payment flows, as all incoming and outgoing payments will take the same form. This will enable your company to consolidate your payments and liquidity management in one location. If you have euro area-wide business you will save money and time.

How can your company prepare for SEPA?

Check that IBAN (a standardised account number) and BIC (a bank identifier code) are included on your invoices if you have counterparties in the SEPA region. Although SEPA focus on payments in Euro many companies prefer to use IBAN and BIC for all their payments.
Ensure that you have received IBAN and BIC from your company's suppliers and that you have updated your ERP system.
Assess the opportunities that SEPA offers in terms of reallocating and rationalising your company's payment flows.
Discuss the effects of SEPA and the new XML-format on your ERP system with your company's business system providers.

How can Swedbank assist you?

If you are wondering about how SEPA will affect your business, please get in touch with your Client Executive at Swedbank or your local branch.

We will tell you more about how you as a customer will benefit from SEPA and the Swedbank offering in the Nordic/Baltic region.