The legal framework for SEPA is defined in the European Commission’s legal initiatives. The following legal acts are of fundamental importance for SEPA: Regulation (EU) No 260/2012 (SEPA Regulation), the Austrian Federal Act on the Provision of Payment Services (Zahlungsdienstegesetz 2018 – ZaDiG 2018) as well as Regulation (EC) No 924/2009 on cross-border payments.
Regulation (EU) No 260/2012 (SEPA Regulation)
In March 2012, the European Parliament and the Council passed Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro (SEPA Regulation).
The core element of this regulation is the single migration deadline (initially February 1, 2014), by which all national credit transfers and direct debit transactions must migrate to SEPA formats. At the suggestion of the European Commission the transition period for the migration to the new formats was extended by six months until August 1, 2014 which is specified in Regulation (EU) No 248/2014. Moreover, the SEPA Regulation also stipulates a transitional period for certain national payment services. These so-called niche products can be defined at the national level; their share in the respective national market must not exceed 10% and they must be replaced by February 1, 2016, at the latest.
Since February 1, 2016, customers are no longer obliged to state the BIC for cross-border payment transactions in Euro within the European Economic Area. For domestic payments IBAN-only applies since 2014.
Direct debit mandates previously issued in a national procedure will remain valid also in the SEPA Direct Debit Core Scheme (SDD Core). New mandates, however, will have to be issued for the SEPA Direct Debit Business to Business Scheme (SDD B2B), the new direct debit procedure for businesses only.
Payment Services Act (Zahlungsdienstegesetz – ZaDiG)
With the adoption of Directive 2007/64/EC on payment services in the internal market (Payment Services Directive – PSD), a uniform legal framework was established for payments made in euro within the European Union. The PSD, which provides the legal basis for SEPA, was transposed into Austrian law by the Payment Services Act (Zahlungsdienstegesetz, ZaDiG) in November 2009. Due to changes in market conditions the Directive on Payment Services has been revised. The new EU directive (now “PSD2”, EU 2015/2366) entered into force on 13 January 2018 and superseded its predecessor. In Austria, PSD2 was transposed into national law by an adapted version of the Payment Services Act (Zahlungsdienstegesetz 2018). These legislative amendments shall enhance consumer protection, promote innovation and further improve the security of payment services.
Regulation (EC) No 924/2009 on cross-border payments
Regulation (EC) No 924/2009 on cross-border payments in the Community provides for harmonized charges for cross-border euro payments and direct debits across the EU as well as for transactions with the EEA countries (Iceland, Liechtenstein, Norway).
Regulation (EU) 2019/518 amending Regulation (EC) No 924/2009 as regards certain charges on cross-border payments in the Union and currency conversion charges
The new EU regulation, amending certain provisions of regulation (EU) No 924/2009, was published in the Official Journal of the European Union on 29th March 2019. While current legislation provides for harmonized charges for cross-border payments and domestic payments in the currency euro only, the new regulation now extends the scope also to domestic payments in the currency of EU member states that are not part of the euro area. Furthermore it creates more transparency for consumers regarding currency conversion services and resulting charges.
The new provisions regarding harmonization of charges will apply from end 2019, those regarding conversion services from mid 2020.