Europeans Will Have Equal Payment Terms in Relation to European Banks

In less than a year, citizens of the Eurozone, including Slovak consumers, businesses and other economic entities will be able to fully enjoy the benefits of a common European currency for cashless payments. SEPA is defined as an area where consumers and businesses will be able to make and receive payments in euro within a country or between countries with identical terms, rights and obligations, regardless of their location.

“Within SEPA, it will not be necessary for a user of payment services to have one account in the Slovak Republic and a second account in another SEPA country, ie it will be possible to make all payments in SEPA from one account with the same efficiency, comfort, speed and charge,”explained Martin Váross, Director of Advisory for Financial Institutions at Deloitte.

The payment terms will be standardised and harmonised, which will lead to simpler and especially cheaper payment services. Besides making cash flow more efficient, large corporations with cross-border operations focused on achieving the highest possible level of automation, standardisation and centralisation with respect to the processing of payments, will have the ability to make direct payments from an account in any EU country with as much ease as a domestic payment. The benefits for businesses will be multiplied by the volume of payments that businesses make and receive within the EU.

“In practice, SEPA will mean one account, one standard, one format, one terminal, a unified set of payment tools, cheaper, faster and more transparent euro payments,” said Zuzana Kalivodová, Senior Consultant in Deloitte’s Advisory function for Financial Institutions with six years’ experience at the European Commission in the Payment Services Department.

“Thanks to SEPA, a consumer will “make” EUR 129 on average (2006 – 2012). A net contribution of SEPA for a company or a corporate client is EUR 1.5 million on average (2006 – 2012), and the SEPA investment (implementation costs) amounts to EUR 150 thousand on average,” adds Zuzana Kalivodová.

The introduction of SEPA will limit banks’ handling of a client’s resources as the guaranteed maximum duration of a transfer is one day across the EU, which means that consumers and businesses will have immediate access to their financial resources without delayed credit to their account. Until now, banks were able to make “delayed credit” of payments so the money paid to a consumer or business was not credited to their account immediately. This situation will end after the introduction of SEPA: as soon as the payment is credited to a personal or business account, they have to have immediate access to the money.

Moreover, SEPA will make the payment terms more transparent and allow consumers to compare easily the terms and price of a payment service and choose the “cheapest” bank. If a consumer chooses another bank institution, the old bank cannot charge any fee for the termination of the account.

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