EU tax and salary systems change needed to allow standardisation, says payments body

The EPC said that 'single euro payment area' (SEPA) member countries may need to change local laws that allow for existing payment systems that would not integrate properly with new standardised schemes being introduced across the region.

The EPC developed standard payment schemes and frameworks for electronic payments after the Commission, EU governments and the European Central Bank tasked industry with creating harmonised systems that would promote the single euro currency.

A host of major banking institutions, including Barclays, BNP Paribas, Deutsche Bank and HSBC, are members of the EPC which developed the self-regulatory systems which it operates in the SEPA zone. SEPA consists of the 27 EU countries plus Iceland, Norway, Liechtenstein, Switzerland and Monaco.

Earlier this year a new SEPA Regulation came into force which, among other things, sets out new rules on 'payment accessibility'.

Under the Regulation those making or accepting credit transfers, or collecting funds from direct debits, should generally not have to detail the location of their payment accounts in order for those transactions to take place. According to the EPC these rules were set "to enable any customer to make all payments and receive all payments within the Single payments market from one account in one location."

However, because SEPA members sometimes operate idiosyncratic systems for tax and salary payments, those countries may have to adapt local laws in order to ensure there is compliance with the SEPA Regulation, the EPC said.

"Some countries have specific national processes around tax and/or salary payments, which often require users to hold in-country accounts and/or make payments via local financial institutions," the EPC said in new guidance (25-page / 1.63KB PDF) on the SEPA Regulation. "Additionally, from a technical and information related perspective, local tax payment processes (as well as other types of transactions such as salary payments) often differ in terms of the content and structure of the payment messages."

"A logical consequence of [the payment accessibility rules under the SEPA Regulation] is that Member States will now need to take steps to modify any existing local regulation that would otherwise prevent the full enforcement of this provision and therefore ensure that all types of credit transfers and direct debits in Euro (except those processed via [large-value payment systems]) can be transacted using the SEPA schemes," it said.

Although there is a staggered timetable for complying with some of the provisions set out in the SEPA Regulation, the rules around payment accessibility came into force as soon as the Regulation was published in the Official Journal of the European Union in March this year.

However, member states have until 1 February next year to establish a penalties regime for dealing with payment service providers that infringe the Regulation.