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Explainer: What is this SEPA thing all about?

Have you your IBAN ready?

A MAJOR CHANGE in how electronic transfers of credit take place across Europe is due to come into force on later this year, known as SEPA.

A date of 1 February was originally set for this, but has been pushed back until August as many companies are not ready to migrate. It will still be in operation, but compliance is not required until later this year.

You are likely to have heard or seen advertisements asking you if your business is ready for it, but not a huge amount about what consumers can expect. There are a few things they have to bare in mind, but nothing too complicated.

If you’re a little unclear about what SEPA, fear not, TheJournal.ie can explain.

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Basically, what is it?

Payment systems across the 28 EU Member States, along with Iceland, Lichtenstein, Monaco, Norway and Switzerland, will now be harmonised – hence the name, the Single Euro Payments Area.

This means that if you want to move money from, for example, a Republic of Ireland bank account to a French bank account, it will now be as easy as if both accounts were in the same country.

Previously, different processes applied.

I know what you’re thinking. “I can now easily pay the electricity bill for my holiday villa in Spain .”

Well aren’t you lucky? But yes. You can now setup a direct debit from your own ROI bank account, without having to setup a seperate one in Spain.

First thing’s first – you will need your IBAN.

Previously you would have been required to provide your six digit National Sort Code (NSC, something that looked like 92-12-34) and eight digit Basic Bank Account Number (BBAN) in order to receive payments.

More recently, you might have been asked to provide your International Banking Account Number (IBAN). This is what you will be asked for from now on – it will look something like IE64IRCE92050112345678.

This is a combination of your Sort Code and Account Number, with an extra two letters and two numbers, followed by another four letters, at the start. You will find it on recent bank statements, or alternatively the Irish Payment Services Organisation (IPSO) offer a secure online IBAN generator.

This is only for electronic payments. Your NSC and BBAN will still appear on any paper transactions, such as a cheque book.

You will need your IBAN if you’re signing up for a new direct debit. Everything else will be switched over automatically. Sit back and relax, alright?

B2B or not B2B, or B2C. What?

This means “Business to Business” or “Business to Consumer” Transfers, the first simply deals with direct debits between two businesses, but the second is what a consumer should be interested to hear more about.

Under this new form of “core transaction”, you are entitled to a complete refund of a direct debit for eight weeks after the payment is taken.

Of course you will still owe money to your phone company or electricity company or whoever it might have been, but it will be back in your own account.

Don’t own a business? That’s you off the hook.

You shouldn’t notice a change until the next time you enter a situation where you would usually be asked to provide your NSC or BBAN. Everything else should be handled by the banks and business who take direct debit payments or provide you with credit transfers, such as payroll.

What you will be able to do is setup direct debits from your account from companies in other countries.

Oh, you do own a business? Well then…

Businesses must ensure their employee payroll and any direct debits they might be subject to are switched over to SEPA, and that their accounting systems have been updated. This is more important for large companies, and who have been contacted by the Central Bank already to give them a heads-up that it might be tricky.

If they don’t switch over their systems, they simply won’t be able to make electronic transfers. Banks will no longer accept non-SEPA payments from within the 32 states using the system. They will also be breaching EU regulations.

And how will this change the day-to-day running of a business?

Any difficulties you’ve encounter when attempting to move money from one of the 33 states involved to another will no longer apply. It will be as if both parties are operating within Ireland.

Same as consumers, businesses can avail of some financial services offered by banks in other countries without having to open an account there.

This means that for companies who operate in more than one country, the can consolidate their banks. This means less fuss and less cost.

That wasn’t enough?

If you are looking to read about SEPA in more detail, have a look here:

Read: Check behind the couch, there’s still €231.3m worth of Punt hanging around >

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26 Comments
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    Mute Shane Morris
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    Jul 3rd 2019, 10:44 PM

    If only the Brits managed to get China to agree to some kind of guarantee in 1997…say a backstop, just in case China ever reneged on an international treaty…despite all the reassurances.

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    Mute wattsed56
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    Jul 4th 2019, 9:00 AM

    @Shane Morris: Perhaps read the last paragraph of the article.

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    Mute Mushy Peas
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    Jul 4th 2019, 9:40 AM

    @wattsed56: you missed his point entirely.

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    Mute Fergus Murphy
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    Jul 3rd 2019, 10:32 PM

    Maybe the Brits can solve all of this with existing technology

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    Mute Devilsavocado
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    Jul 3rd 2019, 11:03 PM

    China is going to do what China is going to do and there is nothing the British can do about. The Chinese have little to fear from anybody in either military or economical sanctions, they have become a massive world power that puts all other countries but the US into a lower league, Britain better get used to the fact they are no longer at the big boys table.

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    Mute Liam O hAodha
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    Jul 3rd 2019, 11:42 PM

    The Brits really have made a balls of everywhere they occupied & put borders in, Ireland, China, Palestine, India/Pakistan, North Africa, Middle East, Argentina/Malvinas islands, actually everywhere they caused problems

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    Mute John Smith
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    Jul 4th 2019, 8:59 AM

    @Liam O hAodha: Well funny enough if you don’t put up borders then you don’t get countries . You are a nationalists . You do believe in dividing up big countries into small countries do you not .

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    Mute Sean Oige
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    Jul 3rd 2019, 10:32 PM

    Suits China to wipe out hk financial sector and allow Shanghai to become the financial sector in the region. Will be interesting to see large corporates response if that happens…

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    Mute Thomas Devlin
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    Jul 3rd 2019, 10:51 PM

    Send in the gunboats,how dare those foreign chappies threaten our great British empire

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    Mute Murf
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    Jul 4th 2019, 1:41 AM

    @Thomas Devlin: you f€&@“g idiot

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    Mute Cal Mooney
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    Jul 3rd 2019, 11:11 PM

    You really have to wonder what the english are up to? Do they really think they can influence China. They definitely are not going to be influencing the EU from here on out. They long for their former colonial days and the sickening experience that every occupied nation suffered. Maybe China should invade england and bring true freedom to its people by getting rid of the current regime installed there. And release Julian Assange while they are at it. If only.

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    Mute John Smith
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    Jul 4th 2019, 10:32 AM

    @Cal Mooney: How dare Britain stand for the rights of the people of Hong Kong .

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    Mute Ben Jamen
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    Jul 3rd 2019, 11:44 PM

    Great bunch of lads though…

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    Mute Angry_Man41
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    Jul 3rd 2019, 11:02 PM

    China, conform!

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    Mute kushal kumar
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    Jul 4th 2019, 5:41 AM

    News reports in the month of June 2019 say that Hong Kong is these days upset with the government. The city’s pro- Beijing leaders are reportedly pushing a bill through legislation that would allow extradition to any with which it already does not already have a treaty – including mainland China for the first time. Huge protesting crowds gathered Hong Kong on 9 June as anger rose over the proposed bill. The protesters also assembled in large number on 1 July 2019 , the anniversary day of Hongkong becoming part of China , turned violent and marched to the Parliament. In this context , it is apt to refer readers to this Vedic astrology writer’s predictive alerts for more care and appropriate strategy in article – “ world trends in April to August 2019” – brought to public domain widely in the month of March and subsequently on 5 April in present year 2019. The alert had said that during a period of four and a half months from mid- April to August , particularly June in 2019 , China may take more care and appropriate strategy in relation to sort of protests among some Unions or associations or federation within the country. The related text in the article reads like this :-
    “ 4. Unions , federations , groups or associations within the country may show signs of divergence in more than one sphere of life. In other words , the spirit of unity in them may be short of being ideal”. It seems the alert has been precisely meaningful.
    Note : – This writer’s other significant time-tested predictive work in relation to the U.S. so far can be found at wisdom-magazine.com/Article.aspx/4897/ and wisdom-magazine.com/Article.aspx/5060/. Separately and in addition , this writer has alerted already on 22 June , 2019 that more care and appropriate strategy may be called for during a period of fortnight from 25 September to 9 October , particularly on 28 -29 September , in the present year 2019 against likely War or WW3 -like scenario , massive earthquakes , storms-tornadoes-cyclones , floods, landslide , road-rail-air safety concerns , economic and financial major worrisome concerns , health woes related to stomach-head-brain , human malice at its height in operation and the like. Vulnerability of a country or region appears to be main determining factor. Having said that , it may be made clear that human more care and appropriate strategy has weight over planetary trend generating impacts.

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    Mute Donal O'Carroll
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    Jul 4th 2019, 6:07 AM

    @kushal kumar: and your point is …?

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    Mute FlopFlipU
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    Jul 4th 2019, 8:11 AM

    @kushal kumar: ✋

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    Mute Sean Buckley
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    Jul 4th 2019, 9:16 AM

    @kushal kumar: Will Galway bate Mayo!

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