SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS P...
SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS P...
SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS P...
SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS P...
SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS P...
SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS P...
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Sepa (single euro payments area) a major step in european payment landscape

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This Document is all about some details about SEPA the single euro payments area.

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Sepa (single euro payments area) a major step in european payment landscape

  1. 1. SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS PROCESS EXPERT COMMUNITY | bpx.sap.com© 2007 SAP AG 1SEPA (Single Euro Payments Area): A major step in EuropeanPayment LandscapeApplies to:Business Process ExpertsSummaryIn present scenario, there is an immense regulatory pressure on various payment service providers (e.g.banks) all over the world. With the introduction of Sarbanes Oxley Act, Basel II and many other complianceacts, these providers are severely scrutinized by various regulatory authorities. SEPA is one of suchcompliance initiatives in the European payments landscape. This article gives an insight into SEPA andpossible transformation into payments landscape with the help of IT.Author : Abhijeet SakargayanCompany: HCL Technologies LtdCreated on: 10 September 2007Author BioAbhijeet Sakargayan is working with HCL Technologies Ltd. as a GRC Business Process expert.
  2. 2. SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS PROCESS EXPERT COMMUNITY | bpx.sap.com© 2007 SAP AG 2Table of ContentsApplies to: ........................................................................................................................................ 1Summary.......................................................................................................................................... 1Author Bio ........................................................................................................................................ 1SEPA story....................................................................................................................................... 2About European Payments Council (EPC)...................................................................................... 3Objectives of SEPA ......................................................................................................................... 3Milestones........................................................................................................................................ 3Role of IT ......................................................................................................................................... 3SEPA @ SAP .................................................................................................................................. 4Need of the hour.............................................................................................................................. 5Related Content............................................................................................................................... 5Disclaimer and Liability Notice......................................................................................................... 6SEPA storyIt all started in the year 2002 as an initiative to transform European banking Infrastructure by creation of aEuropean Payments Council (EPC). The purpose of such initiative was to define new rules and frameworksand simplify cross border complex payments process across Europe. This project aimed at achievingharmony between national and international payments in non-cash mode. European banking industry usedto face severe losses in the process of cross border transactions. This led the banks to create the EPC.SEPA aims at providing a common platform for all the associated members to make and receive payments ina single currency (i.e. euro) within Europe irrespective of their base location. SEPA project involves keymembers like European Commission (EC) and European Central Bank (ECB) supported by the EuropeanPayment Council (EPC).
  3. 3. SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS PROCESS EXPERT COMMUNITY | bpx.sap.com© 2007 SAP AG 3About European Payments Council (EPC)It is a European governing body which consists of more than 50 banking institutions formed to standardizethe payments mechanisms in Europe. It is the decision making and coordinating body which is responsiblefor issues related to payment systems in the European Banking industry.Objectives of SEPA• It aims to provide a single area for all payments across Europe.• Single Account, single card mechanisms irrespective of countryMilestonesSEPA project aims at achieving several milestones in next few years. These milestones are the major drivingfactor for involvement of various big companies in this area. The major ones are:• Availability of banking instruments in the form of plastic money across Europe irrespective ofgeography. (Pan- European Credit/Debit Facility)• Increase the efficiency of payment processes in current financial infrastructure through consolidationof processes.Role of ITInformation technology can play a major role in this transformation process. The main area of focus is theStandardization of fragmented payment market. This transformation process is being led by various big ITplayers in the market. The transformation process can be depicted as:
  4. 4. SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS PROCESS EXPERT COMMUNITY | bpx.sap.com© 2007 SAP AG 4Transformation (As-Is To-Be)• Localized paymentenvironment• Multiple standards,frameworks and experiences• Lack of interoperabilityamong different schemes• Fragmented implementation• High complexity in crossborder transactions• High Risk• Uniformity in the solutionswith other services also• Consistency in paymentstandards, frameworks andinstruments• High level of interoperabilityamong different schemes• Consolidatedimplementation• Reduction in complexity• Improved Risk Management& High efficiencySEPA @ SAPAccording to industry specialists, the level of preparedness for SEPA in the corporate world is yet to beimproved. In fact companies are putting SEPA adopted implementation on the back burner for some time tillthe banks become mature enough on their part. In corporate world, SEPA has major impact on the electronicconnectivity of various companies with banks and other financial institutions, the ways in which their ERPdata is handled, payments mechanisms and much other functionality.As an early step to establish itself in the market, SAP has provided various applications to help companiescomply with the SEPA regulations. SAP Payment Engine application is one of them. This application acts asa standard interface which streamlines all the payment processes and allows multiple applications to interactthrough single payment point. SAP also provides an integrated package called SWIFT (Society forWorldwide Interbank Financial Telecommunication) which is useful for achieving lower Total Cost ofOwnership (TCO) in bank communications. This package helps in efficient payment processing. SWIFTNetprovides a direct access to SWIFT and other financial institutions across the globe. Moreover SAP is
  5. 5. SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS PROCESS EXPERT COMMUNITY | bpx.sap.com© 2007 SAP AG 5banking on SAP NetWeaver as a technology of its future and building all major applications and integratedpackages around it.Need of the hourThe introduction of SEPA compliant payment schemes is still in the pipeline. The expected official launch isJanuary 2008. The positives and negatives are still to be realized. Few IT majors are already in the processof developing solutions for their prospective customers under this initiative. But it is suggested by variousindustry experts to take some other pro- active measures in this area of compliance so as to catch the trainat the right time.Related Content• Addressing SEPA with SAP Payment Engine• http://www.sap.com/usa/industries/banking/pdf/BWP_SAP_Payment_Engine.pdf• SEPA vision
  6. 6. SEPA (Single Euro Payments Area): A major step in European Payment LandscapeSAP DEVELOPER NETWORK | sdn.sap.com BUSINESS PROCESS EXPERT COMMUNITY | bpx.sap.com© 2007 SAP AG 6Disclaimer and Liability NoticeThis document may discuss sample coding or other information that does not include SAP official interfacesand therefore is not supported by SAP. Changes made based on this information are not supported and canbe overwritten during an upgrade.SAP will not be held liable for any damages caused by using or misusing the information, code or methodssuggested in this document, and anyone using these methods does so at his/her own risk.SAP offers no guarantees and assumes no responsibility or liability of any type with respect to the content ofthis technical article or code sample, including any liability resulting from incompatibility between the contentwithin this document and the materials and services offered by SAP. You agree that you will not hold, orseek to hold, SAP responsible or liable with respect to the content of this document.

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