SEPA (Single Euro Payments Area) is the area in which citizens, companies and other economic agents can make and receive payments in Euro, whether inside or outside national boundaries under the same basic conditions and rights regardless of their location in Europe.
SEPA will include 32 countries in Europe, the 27 members of the European Union (EU) plus Iceland, Liechtenstein, Norway, Switzerland and Monaco.
SEPA payments are always made in Euro. The two accounts, the one of the consumer making a SEPA payment and the one of the creditor receiving the transfer, must be located in one of the 32 countries in the SEPA area.
As example: The nonresident Orange Luxembourg customer can use his foreign IBAN account to pay via Direct Debit his Luxembourgish invoice.
2. Why SEPA?
SEPA is the next logical step after the introduction of Euro notes and coins in 2002, the SEPA payment instruments will allow consumers to easily make electronic payments in euros to any account located within the SEPA zone.
SEPA is prescribed by EC Regulation No 924/2009 amended by Regulation No 260/2012 (European Parliament and European Council)
3. How SEPA does benefit consumers?
Because of SEPA, consumers can rely on a single bank account for payments in 32 countries. As a result, the process of paying bills will be more convenient.
-A French customer and French resident signing a contract with Orange Luxembourg can pay his bill through a SEPA direct debit established on his French account.
-A Luxembourg citizen for business purposes in Germany for several months will pay his German phone service via a SEPA direct debit based on the Luxembourg account.
Convenient and Secure - SEPA represents a simple and safe way to pay bills
Fast and transparent - SEPA mandates don’t need to be validated by the bank before the first payment. This cuts the administrative process to an customer friendly level.
4. The flow of the mandate:
The debtor (customer) completes and signs the SEPA CORE paper mandate.
The creditor (Orange Luxembourg) manages the administrative flow. The SEPA CORE authorization signed by the client will be carefully recorded and processed by Orange Luxembourg and finally archived following the laws and regulations.
Any modification or cancellation must be notified by the Customer to Orange Luxembourg under SEPA.
SEPA is different to the current national direct debit model where the customer’s bank receives the order from Orange and validates the authorization before the first transfert request. This time consuming validation phase is no longer applicable under SEPA, the authorization is given de facto.
5. What account details have to be communicated?
To register a SEPA mandate, the customer has to communicate among others the IBAN and the BIC number.
IBAN (International Bank Account Number) formed by a 16 to 32 digit number and proceeded by two letters representing the nationality of the account. IBAN also contains as numeric value the debtor's bank details.
The BIC is the identification code of the bank. For the time being, this code is imperative. It is formed by of 8 to 11 digits and letters.