The SEPA zone—facilitating money transfers in Europe
As a replacement for national transfers, SEPA (Single Euro Payments Area) transfers have become an established standard for common euro-currency transfers in all countries within the SEPA zone.
A very specific geography
The SEPA zone includes 34 countries: The 28 member countries of the European Union (EU) and the four member states of the European Free Trade Association (EFTA) (Iceland, Lichtenstein, Norway and Switzerland) Monaco and Saint-Martin
It therefore includes countries within the Eurozone (such as France and Italy) as well as EU countries that have retained their own currency (Denmark, Sweden) and those that do not belong to the EU (Iceland, Norway).
Currently, a SEPA transfer takes, on average, one business day to arrive in the account of its recipient. The transfer order must include, at least, the account number to debit, the amount, the desired date of execution, and the IBAN code of the recipient’s account.
Instant SEPA transfers—no sooner said than done
Instant payments have been available in Asia since 1973, with Japan establishing itself as a pioneer in this space. Instant transfers were first established in Europe with Switzerland, in 1987, and are available at the national level in other countries, including the United Kingdom with its Faster Payment system, Blik in Poland, and Swish in Sweden. Currently, only Spain offers an interbank instant transfer service (Bizum) based on the instant SCT.
In November 2017, the Central European Bank (CEB), in an effort to build a single integrated financial market, launched the instant SEPA transfer—or SEPA Instant Credit Transfer (SCT)—on a large scale.
The main advantage of this payment mechanism, compared to traditional SEPA transfers, is its immediacy—recipient accounts are credited in less than 10 seconds. An instant SEPA transfer is irrevocable, and can be completed 24 hours a day, 365 days a year—there is no need to worry about cut-off dates or non-business days. With a limit of €15,000 per operation, the sender is systematically notified in case the transfer is rejected.
Instant transfers—deployment in France and Europe
The launch of instant SCT transfers is scheduled for November 2018 in France, but its accessibility will depend on the progress that individual banks have made on implementing instant payments.
More than 90% of the French market will have access to instant SCT transfers by the end of November 2018 . The democratization of this payment method at the pan-European level, as well as enhanced connectivity among all SEPA zone countries, should follow as a result.
Very simple to carry out from a web interface or mobile application, instant SEPA transfers will offer several advantages.
Individuals will benefit from a fast payment method that allows them to immediately settle running or unexpected expenses. For their part, recipients will be credited within a few seconds, thereby avoiding inconveniences that may arise with other forms of payment, such as cash or checks.
As for businesses, the immediacy of instant payments will allow them to pay suppliers on the date of delivery, while offering flexibility to their clients through payments on delivery or online. This will be a good way to reduce delays in payments, identify outstanding debt and optimize their liquid assets.
Instant payments, already available at BNP Paribas
As the first French bank to deploy Paylib between friends, a mobile real-time payment solution, BNP Paribas will progressively deploy instant SEPA payments for its clients in France and elsewhere in Europe.
As of November 28th , 2018, BNP Paribas will offer:
- The ability to receive instant payments for the entirety of its clientele, across all client categories.
The deployment of this instant payment offer will continue in 2019 with:
- The implementation of a sending offer for individuals and professionals.
- The implementation of the offer for businesses and the deployment of cross-border payments.
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