In the current payment system, businesses face a lot of difficulties in collecting payments from other SEPA countries. Due to the differences in payment models, these payments often require different formats and data elements. Taking these payments is usually expensive and time consuming.
The SEPA Direct Debit scheme simplifies the collection of payments across multiple countries, by defragmenting the payment procedures. This will allow customers as well as businesses to make payments across the SEPA member states just as they make domestic payments.
What is SEPA?
SEPA stands for Single Euro Payments Area, and is an initiative supported by the European Payments Council (EPC). The main purpose of this initiative is to improve the efficiency of cross-border payments and turn the fragmented national markets for euro payments into a single domestic one . SEPA will enable customers to make cashless euro payments to anyone located anywhere in the area, using a single bank account and a single set of payment instruments. Economically speaking, this is very important in achieving economies of scale, by creating a common framework of payment instruments, standards and procedures.