Since the introduction of euro banknotes and coins on 1 January 2002, individuals inside the entire eurozone have been able to make simple payments in cash as they did previously with the national currency. At the same time, no significant results were achieved in terms of reducing fees for non-cash cross-border payments with regard to intra-state payments, which is why electronic (non-cash) payments have not become truly uniform. This hindered cross-border operations and the functioning of the internal market.
The European Commission therefore intervened with Regulation 2560/2001 on cross-border payments in euros, which required the equalisation of fees for an individual payment service provider for cross-border payments and those within a country. This Regulation facilitated and made it cheaper to make numerous types of payments in euros within the internal market and encouraged the payments industry to move towards the creation of a Single Euro Payments Area (SEPA).
The final aim of the SEPA is to introduce harmonised basic payment instruments (credit transfers, direct debits and payment cards) and common standards for citizens and companies to enable non-cash payments to be made and received under the same basic conditions, with the same rights and obligations and as simply, effectively and securely as they are made and received today within national borders. In practice, the SEPA allows the use of a single account and a single series of payment instruments for all payments. Within an integrated European market for payment services in euros, the distinction between payments within a country and cross-border payments will be abolished, effective competition will be established and an opportunity will be ensured for developing and introducing payment innovations of a pan-European nature. Users of payment services will have the opportunity to choose the payment service provider with the most attractive offer, irrespective of country of origin.
In this environment payment service providers will be able to compete on the same basis within the internal market, which required the elimination of the legal, commercial and technical barriers that divided national markets.
In 2002 the largest European banks adopted a strategy for establishing the SEPA, and clearly committed themselves to that goal, adopting a general strategy for meeting the SEPA objectives by 2010. They also reached a consensus about the structure of governance with the European Payments Council (EPC) as the then central decision-making authority, with the aim of abolishing technical and commercial barriers to the creation of the SEPA. The EPC developed detailed rules for credit transfers and direct debits and only a looser framework for card payments. The Bank Association of Slovenia, which manages the SEPA project in Slovenia, has been a member of the EPC since 2004.
On the basis of the knowledge that a single payments market will only be possible within a common legal framework, Directive 2007/64 on payment services in the internal market was adopted, which removed legal barriers to the integration of payments markets, but represents only the necessary and not the sufficient condition for the success of the SEPA. It is necessary to ensure the acceptance of new products by users for the payments markets to become integrated.
The SEPA finally became a fact through the adoption of the Regulation of the European Parliament and of the Council on the introduction of technical requirements for credit transfers and direct debits in euros and amending Regulation (EC) No. 924/2009, which sets out the latest date (at the level of Europe) for the end of the migration of credit transfers and direct debits in euros, namely 1 February 2014.