Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing technical requirements for credit transfers and direct debits in euros and amending Regulation (EC) No 924/2009
Date: 2010-12-16
Institutions: European Commission
Subjects: bank charges, capital transfer, electronic money, financial legislation, intra-EU payment

EN 

EN 

   EN 

 
EUROPEAN COMMISSION 

Brussels, 16.12.2010 
COM(2010) 775 final 

2010/0373 (COD) 

. 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing technical requirements for credit transfers and direct debits in euros and 
amending Regulation (EC) No 924/2009 

(Text with EEA relevance) 

SEC(2010) 1583 final 
 SEC(2010) 1584 final 
 SEC(2010) 1585 final 

EN 

   EN 

 
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal 

The present  proposal has to be seen  in  the  context  of  the  creation of an  Internal  Market  for 
payment  services  in  euro  (Single  Euro  Payments  Area  or  SEPA)  where  there  is  effective 
competition and no difference of regime between cross-border and national payments, thereby 
providing significant savings and benefits to the wider European economy. SEPA will provide 
European  citizens  and  businesses  with  competitively-priced,  user-friendly  and  reliable 
payment  services  in  euros,  and  will  provide  a  platform  for  the  development  of  payments-
related innovation. 

Although  strongly  supported  by  both  the  European  Commission  and  the  European  Central 
Bank,  SEPA  was  originally  conceived  as  a  primarily  market-driven  project.  Union-wide 
schemes  for  credit  transfers  and  direct  debits  were  designed  and  implemented  by  the 
European Payments  Council  (EPC),  a  coordination and decision making body  set up by  the 
European  banking  sector  to  deliver  SEPA.  However,  given  the  current  slow  rates  of 
migration,  there  is  increasing  recognition  by  all  categories  of  stakeholders  that  a  legally 
binding end-date may be necessary to achieve successful project completion. 

Full  integration  of  the  payment  market  will  only  be  achieved  once  Union-wide  payment 
instruments replace completely the national legacy instruments. In order to achieve this goal, 
migration  end  dates  for  credit  transfers  and  direct  debits  in  euro  are  set  up  through  this 
Regulation. 

General context 

On 28 January 2008, the SEPA Credit Transfer (SCT) was launched. Almost two years later, 
on 2 November 2009, the launch of the SEPA Direct Debit (SDD) marked the second crucial 
milestone on the way towards the realisation of SEPA through Union-wide schemes. 

Secure and efficient payment systems are crucial to the conduct of economic transactions and 
to  the  proper  functioning  of  the  Internal  Market.  The  euro  as  a  common  currency  has 
facilitated cash payments between the Member States since 2002. However, electronic Union-
wide  payment  instruments  are  still  far  from  replacing  national  payments  for  a  variety  of 
reasons.  The  prevailing  market  uncertainty,  the  generally  difficult  economic  climate,  the 
disadvantages for first movers in a network business, the perceived lack of legal certainty on 
an appropriate long term business model for SDD complying fully with EU competition rules 
and the duplicate costs of operating both SEPA and legacy payment systems have led many 
market players, especially on the supply side to call for EU legislation setting an end-date for 
moving to SEPA. Two Resolutions of the European Parliament1 have also stressed the need 
and  advantages  of  a  migration  end  date  as  have  the  ECOFIN  Council  conclusions2  which 
invited  the  Commission  in  close  collaboration  with  the  ECB  to  carry  out  a  thorough 
assessment. Under Article 127 of the Treaty on the Functioning of the European Union, the 

1 

2 

http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2010-
0057+0+DOC+XML+V0//EN 
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/111670.pdf 

EN 

2 

   EN 

                                                 
ECB (ESCB) has as a basic task to promote the smooth operation of payment systems. In this 
context, the ECB has played an important role in providing guidance to the market to develop 
SEPA. 

Two years after the launch of the SEPA credit transfer, the number of SEPA credit transfers 
processed by clearing and settlement mechanisms located in the euro area has not yet reached 
the 10 % threshold. A linear extrapolation of the current SCT migration rate of 9.3 % (as of 
August 2010), suggests that it will take around 30 years to complete SEPA. Even in a more 
optimistic scenario, it seems very unlikely that SEPA migration will be completed in less than 
15–20 years without additional legislative intervention. This inertia substantially delays SEPA 
migration  and  as  a  result  could  greatly  reduce  the  direct  and  indirect  potential  benefits  of 
SEPA  for  the  wider  European  economy3.  Although  SEPA  migration  will  require  users, 
including  citizens  and  small  and  medium  sized  companies,  to  changeover  to  a  common 
Union-wide  bank  account  numbering  based  on  IBAN  and  BIC,  the  transition  will  be 
facilitated  by  industry  through  specific  information  efforts,  the  incorporation  of  IBAN  and 
BIC on account statements and on payment cards as well as automatic conversion facilities. 

Existing provisions in the area of the proposal 

This initiative will complement the existing legal framework for payment services within the 
EU. 

On 1 November 2009, Regulation (EC) No 924/2009 of the European Parliament and of the 
Council  of  16 September 2009  on  cross-border  payments  in  the  Community  replaced 
Regulation  (EC)  No  2560/20014.  This  Regulation  had  in  effect  reduced  charges  for  cross-
border  payment  transactions  in  euro  up  to  EUR 50 000  to  the  level  of  national  charges  and 
encouraged the European payments industry to build the Union-wide payments infrastructure 
needed to create SEPA. 

Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 
on  payment  services  in  the  internal  market  (the  so  called  'Payment  Services  Directive'  or 
PSD)5 aims to establish standardised conditions and rights for payment services offered in the 
market  for  the  benefit  of  consumers  and  companies  across  the  Union  and  provides 
a harmonised legal basis for SEPA. 

Consistency with the other policies and objectives of the Union 

The objectives of the proposal are consistent with the policies and objectives pursued by the 
Union. First, they will improve the functioning of the internal market for payment services. 
Second,  they  broadly  support  other  Union  policies,  in  particular  consumer  policy  (by 
facilitating  secure,  Union-wide  payment  systems),  and  competition  policy  (by  establishing 
equal obligations, rights and opportunities for all market players and facilitating cross-border 
provision  of  payment  services,  thus  increasing  the  level  of  competition).  The  impact 
assessment  accompanying  this  proposal  concluded  that  only  a  rapid  and  comprehensive 
migration to Union-wide credit transfers and direct debits would generate the full benefits of 

3 

4 
5 

The  potential  direct  and  indirect  benefits  of  SEPA  exceed  EUR 300 billion  over  a  six-year  period, 
assuming that migration to SEPA instruments is comprehensive and rapid. See SEPA: potential benefits 
at stake, CapGemini, 2007, 
http://ec.europa.eu/internal_market/payments/docs/sepa/sepa-capgemini_study-final_report_en.pdf 
OJ L 266, 9.10.2009, p. 11. 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:319:0001:01:EN:HTML 

EN 

3 

   EN 

                                                 
 
an integrated payments market. Market forces and self regulatory efforts have proven not to 
be  sufficient  to  drive  concerted  migration  to  SEPA.  By  facilitating  economic  transactions 
within  the  Union,  they  also  contribute  to  the  attainment  of  the  wider  objectives  of  the  EU 
2020 strategy6. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Consultation of interested parties 

Consultation methods, main sectors targeted and general profile of respondents 

The Directorate-General Internal Market and Services held a public stakeholder consultation 
on  whether  and  how  deadlines  should  be  set  for  the  migration  of  existing  national  credit 
transfers  and  direct  debits  to  the  new  SEPA  payment  instruments  between  June  and 
August 2009 and published its results in September 2009. A summary of the consultation has 
been published on the DG’s website7. 

Several  consultations  on  SEPA  have  been  made,  on  an  annual  basis,  through  the  European 
Business Test Panel. The last consultation was held in the second half of 2009 and more than 
400 enterprises  responded.  These  were  composed  of  85 %  SMEs  and  15 %  larger 
corporations.  The  2009  consultation  included  questions  on  phasing  out  legacy  payment 
instruments and setting a SEPA migration end-date. 

Moreover,  discussions  with  the  banking  industry  on  the  SEPA  Direct  Debit  business  model 
have  been  ongoing  for  some  time.  These  discussions  focused  on  the  issue  of  multilateral 
interchange  fees  (MIF)8  and  led  to  the  adoption  of  transitional  provisions  on  MIF  in 
Regulation (EC) No 924/2009. Nonetheless, exchanges of opinions continued as the long term 
business  model  for  SDD  had  not  been  determined  by  the  industry.  In  order  to  provide 
guidance to the banks, the Commission and the ECB issued a joint statement in March 2009, 
followed by a Commission Working Document in November 20099. A public consultation on 
this document has been completed in December 2009.Furthermore, a questionnaire was sent 
to selected banks by the Commission services in December 2009–January 2010. It focused on 
the  specific  issue  of  duplicate  costs  incurred  by  individual  payment  service  providers  for 
running payment systems and processes (payment platforms) for existing national payments 
and  new  Union-wide  SEPA  payments  in  parallel.  For  this  purpose,  nine-teen  of  the  largest 
banks  or  banking  groups  in  Europe,  representing  a mix  of  commercial,  savings,  and 
cooperative  banks  from  nine  countries,  were  selected.  A similar  survey  was  sent  out  to 
payment  processors  and  to  payment  service  users  (mostly  businesses),  but  did  not  yield  a 
sufficient response rate for analysis. 

6 

7 
8 

9 

the 

Digital 

Agenda 

adopted 

In connection with the EU 2020 strategy, this proposal has been identified as one of the key initiatives 
of 
2010, 
by 
http://ec.europa.eu/information_society/digital-agenda/documents/digital-agenda-communication-
en.pdf. 
http://ec.europa.eu/internal_market/payments/docs/sepa/feedback_migration-2009_09_29_en.pdf 
Multilateral  interchange  fee  is  the  amount  paid  by  a  payment  service  provider  of  the  payee  to  the 
payment service provider of the payer as a remuneration for each direct debit transaction. 
For more information and full texts of these documents, see 
http://ec.europa.eu/competition/sectors/financial_services/banking.html. 

Commission 

in  May 

the 

EN 

4 

   EN 

                                                 
Discussions  and  exchanges  of  opinions  were  held  between  2008  and  2010  with 
Member States, financial institutions, consumer organisations and other social and economic 
partners,  notably  through  the  existing  consultative  committees  on  retail  payments:  the 
Payment Systems Market Expert Group (PSMEG), the Payments Committee (PC) and the EU 
Forum of national SEPA Coordination Committees. 

Discussions,  responses  and  written  contributions  provided  by  the  stakeholders  served  as 
a basis  for  the  analysis  presented  in  two  Commission  documents:  the  Impact  Assessment 
accompanying  this  proposal  and  a  working  paper  made  available  to  the  public  on  the 
Commission  website  for  comments  between  7  and  23 June 2010.  This  paper  provided  for 
a number  of  issues  which  would  have  to  be  covered  when  setting  mandatory  end-dates  for 
both credit transfers and direct debits. 

Summary of responses and how they have been taken into account 

There was a broad support among all stakeholders for fixing deadlines for the full migration 
to SEPA by EU binding regulation: only legislation at the level of the Union can provide the 
impetus for widespread use of Union-wide credit transfers and direct debits. It was argued that 
SEPA instruments should not only complement but replace existing legacy instruments. 

While  the  majority  of  the  stakeholders  supported  the  approach  of  fixing  two  separate 
deadlines for migration of credit transfers and direct debits, some of them favoured a single 
migration end-date for both payment services. Furthermore, the supply side and some of the 
users strongly advocated for longer migration periods in particular for direct debits. 

In particular, in the light of the responses received to the consultation as well as other industry 
representations,  a  final  public  hearing  was  held  by  the  Commission  on  17  November  to 
address  two  important  issues.  These  were:  first,  whether  the  Regulation  should  mandate 
directly  the  payment  schemes  as  developed  by  the  payments  industry  instead  of  using  an 
approach based on mandatory technical requirements; and second, whether in the interests of 
clarity,  specific  legal  provisions  should  be  included  regarding  an  appropriate  long-term 
business model for direct debits. 

As a result of the intense consultation, it has been concluded that a mixed approach consisting 
of setting common standards and general technical requirements, is the most appropriate for 
defining Union-wide payment instruments. These technical requirements should apply to the 
whole  payment  service  transaction  chain,  from  payment  user  to  payment  user  through  their 
respective payment service providers. This ensures the reaping of all SEPA benefits which are 
generated on the demand (payment service user) side of the market. However, the supply side 
asked for the use of the existing SEPA schemes developed by the European banking industry. 

A large number of stakeholders welcomed the proposal for Member States to exempt specific 
national  payment  products  fulfilling  certain  conditions  (e.g.  domestic  transactions,  market 
share below a threshold) for a limited time after which all legacy products would have to be 
phased  out.  Others  would  have  preferred  a  permanent  exemption  in  order  to  continue  using 
such specific products. Responses to the consultation also consistently confirmed that there is 
a  strong  need  to  clarify  the  validity  of  a  long-term  business  model  for  direct  debits  which 
complies with EU competition rules. 

Collection and use of expertise 

EN 

5 

   EN 

A comprehensive study of the costs and benefits of SEPA migration was commissioned from 
Cap Gemini Consulting and its results published in January 2008. 

Moreover, in August  2008,  the Commission has published a study commissioned from Van 
Dijk  Consultants,  with  a  view  to  preparing  the  monitoring  of  the  impact  of  SEPA  on 
consumers. 

Impact assessment 

The  Commission  carried  out  an  impact  assessment  listed  in  the  Work  Programme.  This 
impact assessment has been prepared in close cooperation with the ECB. 

The impact assessment discusses the issue of slow migration to SEPA credit transfer (SCT) 
and  SEPA  direct  debit  (SDD),  resulting  in  coexistence  of  national  legacy  instruments  and 
SEPA payments. It identifies the root cause of slow migration progress: uncertainty about the 
completion of SEPA and co-related problem drivers, such as the lack of incentives to develop 
SEPA products fully meeting user needs, reluctance to invest because of the disadvantage of 
being a 'first mover' and a fragmented demand side with a low level of SEPA awareness. It 
also lists the effects of slow migration. At the 'micro' level, multiple payment platforms need 
to  be  maintained  by  the  market  players  on  the  supply  and  demand  side,  which  results  in 
duplicate  operational  costs  for  maintaining  those  systems  and  negative  returns  on  SEPA 
investments.  At  the  'macro'  level  continuation  of  national  fragmentation  in  the  EU  market 
leads to untapped economies of scale, restricts competition and hinders innovation. 

The  impact  assessment  considers  three  scenarios:  no  intervention,  additional  incentives  for 
SEPA migration without setting an end-date and the impacts of setting a migration end-date. 
It concludes that the best scenario for the Union payments market, the European economy and 
the stakeholders is setting an end-date for migration by way of a Regulation. 

Subsequently, the impact assessment considers the best ways of implementing the end-date at 
the  technical  level,  by  discussing  policy  sub-options  for  the  end-date  implementation  in 
several areas. 

for  adopting  Union-wide  credit 

Reference  basis 
transfers  and  direct  debits.  The 
recommended option is to establish an end-date on the basis of general technical requirements 
i.e. requirements, which need to be fulfilled by Union-wide credit transfers and direct debits. 
The technical requirements will include the existing international and European standards. 

Transaction  domain.  It  is  recommended  to  follow  an  approach  whereby  the  technical 
requirements defined by an end-date would apply throughout the whole payment transaction 
domain  i.e.  for  the  customer-to-payment  service  provider  and  payment  service  provider-to-
customer domain on top of the payment service provider-to-payment service provider domain. 
An estimated EUR 84 billion of operational savings on the demand side depends entirely on 
payment market integration extending beyond the inter-bank space. 

Product  specification.  It  is  recommended  to  apply  an  end-date  for  niche  products  too  i.e. 
credit  transfers  and  direct  debits  which  represent  low-volume  payments  and  offer  specific 
functionalities. However, in order to allow for the necessary adaptations in the SCT and SDD 
schemes, a transitional period in the range of 3–5 years will be provided for. 

Member States scope. It is recommended to pursue the option with a common end-date for the 
euro area and a later common end-date for the non-euro area. As euro payment volume shares 

EN 

6 

   EN 

in  non-euro area  represent  only  an  estimated  2 %  of  all  euro  payments,  quick  and  full 
migration of non-euro Member States is not essential to the success of SEPA. 

Deadline  for  migration.  It  is  recommended  to  pursue  the  sub-option  of  separate  end-dates: 
one year after entry into force of the Regulation at the latest for credit transfers and two years 
for direct debits. In practical terms, the adoption delay means that the stakeholders will have 
approximately 30 months to prepare for migration to SCT and 42 months to migrate to SDD 
from the date of adoption of the Commission proposal. 

Clarity on the long term business model for pan-European direct debits. It is recommended to 
prohibit  the  general  application  to  every  direct  debit  transaction  of  multi-lateral  interchange 
fees (MIFs) between payment service providers (and measures of equivalent object or effect). 
Nevertheless,  MIFs  would  be  allowed  under  certain  conditions  for  direct  debit  transactions 
which  cannot  be  properly  executed  or  which  are  being  reclaimed  by  a  payment  service 
provider. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

The proposal for setting technical requirements for credit transfers and direct debits is aimed 
at: 

– 

– 

setting  up  separate  migration  end-dates  for  credit  transfers  and  direct  debits 
respectively,  by  introducing  a  set  of  common  standards  and  general  technical 
requirements 

ensuring  reachability  of  payment  service  providers  for  credit  transfer  transactions, 
along  the  lines  of  the  reachability  obligation  for  direct  debit  transactions  under 
Article 8(1)  of  Regulation  (EC)  No 924/2009  and  interoperability  of  payment 
systems. 

Legal basis 

Article 114(1) of the Treaty on the functioning of the EU. 

Subsidiarity principle 

The  subsidiarity  principle  applies  insofar  as  the  proposal  does  not  fall  under  the  exclusive 
competence of the Union. 

The objectives of the proposal cannot be sufficiently achieved by the Member States for the 
following reason(s): 

At this stage, national migration plans to SEPA exist in almost all Member States. While all 
these plans support SEPA migration, only a few aim for systematic and full replacement of 
legacy  payment  instruments  by  a  given  deadline.  The  target  dates  set  by  stakeholders  at 
national levels are at variance across Member States. In the absence of a common target date 
at Union level, the lack of coordination among Member States as well as among stakeholders 
will  at  best  create  difficulties  in  the  transition  to  SEPA  or  at  worst  a  deadlock  preventing 
effective  migration.  Moreover,  the  target  dates  set  are  often  contingent  on  other  conditions. 

EN 

7 

   EN 

These  plans  therefore  do  not  provide  sufficient  momentum  for  swift  and  comprehensive 
migration to SEPA, and are also not coordinated between Member States. 

Action  at  the  level  of  the  Union  will  better  achieve  the  objectives  of  the  proposal  for  the 
following reason(s): 

By  its  nature  an  integrated  euro  payments  market  requires  a  Union-wide  approach  as  the 
underlying standards, rules and processes have to be consistent across all Member States. This 
supports  the  aim  of  Article 3  of  the  Treaty  on  the  European  Union  which  provides  for 
an internal  market  and  an  economic  and  monetary  union  whose  currency  is  the  euro.  Only 
a European  approach,  co-ordinated  on  the  supply  and  demand  side  can  unlock  the  full 
potential  of  the  network  benefits.  The  alternative  to  a  Union-wide  approach  would  be 
a system  of  multilateral  or  bilateral  agreements  whose  complexity  and  costs  would  be 
prohibitive as compared to legislation at the level of the Union. Intervention at the level of the 
Union would therefore be consistent with the subsidiarity principle. 

The proposal therefore complies with the subsidiarity principle. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s): 

The proposal does not go beyond what is strictly necessary to achieve its objectives. 

All of the proposed rules have been subject to a proportionality test and intensive consultation 
to ensure appropriate and proportionate regulation. 

The  proposal  aims  to  minimise  the  impact  of  changes  on  all  stakeholders.  The  technical 
requirements listed in the annex to the Regulation have been constructed in such a way that 
they allow for the application of the current existing Union-wide schemes without restricting 
flexibility and innovation. 

Furthermore,  the  proposal  allows  Member States  to  decide  on  the  appointment  of  the 
competent authorities so they can use the existing administrative structures and bodies, if they 
wish, to reduce their costs. 

Choice of instruments 

Proposed instruments: Regulation. 

Other means would not be adequate for the following reason(s): 

Setting  an  end-date  for  migration  to  Union-wide  credit  transfers  and  direct  debits  requires 
standardisation at technical level and the fullest possible harmonisation. This argues in favour 
of  a  Regulation  rather  than  a  Directive.  Furthermore,  due  to  the  network  character  of  the 
payment  industry,  most  of  the  benefits  of  SEPA  will  only  materialise  once  the  domestic 
transition  to  Union-wide  payment  instruments  is  completed  in  all  EU  Member States. 
A Directive with potentially differing national implementations runs the risk of perpetuating 
the current payment market fragmentation. Finally, it would delay migration due to the time 
necessary for national transposition. It is therefore recommended to use the legal instrument 
of a Regulation for setting a SEPA migration end-date. 

EN 

8 

   EN 

4. 

BUDGETARY IMPLICATION 

Leaving aside the normal administrative costs linked to ensuring the respect of EU legislation, 
there  will  be  no  budgetary  impact  since  no  new  committees  are  created  and  no  financial 
commitments  are  made.  However,  the  Commission  is  also  a  significant  user  of  payment 
services in its own right and therefore should benefit, along with other users, from enhanced 
competition generated by SEPA. 

5. 

ADDITIONAL INFORMATION 

Simplification 

The  proposal  seeks  to  simplify  the  legislation  as  Article  3  consolidates  the  reachability 
provision  for  direct  debits  as  defined  under  Regulation  924/2009  and  a  similar  reachability 
provision  for  credit  transfers  under  a  single  provision.  Simplifying  payments  handling  will 
have  beneficial  effects  for  stakeholders,  including  public  administrations,  businesses  and 
private individuals. 

Since this Regulation will reduce fragmentation along national barriers and foster competition 
in  the  European  payments  market,  it  will  contribute  to  the  simplification  of  payment 
processes. 

For  example,  public  administrations  as  heavy  users  of  payment  instruments  should  benefit 
from  SEPA  because  it  simplifies  their  payment  processes  and  allows  more  efficient 
'straight-through' processing of payments. Public tendering of payment services at Union level 
should  become  easier,  since  the  number  of  potential  Payment  service  providers  would 
increase, their offers could be better compared and inefficiencies caused by national payment 
formats  should  disappear.  The  combination  of  e-invoicing  solutions  and  SEPA  as  an 
underlying  payment  platform  would  also  facilitate  the  automatic  reconciliation  of  invoices 
and payments. 

Similarly  for  consumers,  who  are  becoming  increasingly  mobile  in  professional  and  private 
terms  standardised  cross-border  payments  would  eliminate  the  need  to  maintain  several 
payment accounts in different countries. 

For  payment  service  providers  and  payment  processors,  economies  of  scale  and  common 
standards achieved under SEPA would make payments across the Union much more efficient. 

Repeal of existing legislation 

The adoption of the proposal entails the repeal of Article 8 of Regulation (EC) 924/2009 on 
reachability for direct debit transactions. For reasons of transparency and simplification, the 
substance of that article is consolidated in Article 3 of the present proposal. 

Review/revision/sunset clause 

The proposal includes a review clause. 

European Economic Area 

EN 

9 

   EN 

The  proposed  act  concerns  an  EEA  matter  and  should  therefore  extend  to  the  European 
Economic Area. 

Detailed explanation of the proposal 

The following short summary aims to facilitate the decision making process by sketching the 
main substance of the Regulation. 

Article 1 – subject matter and scope – states that the Regulation covers the execution of all 
credit transfer and direct debit transactions denominated in euros within the Union. It does not 
cover  some  types  of  payment  transactions  -such  as  payment  card  transactions,  money 
remittance and payment transactions through means of any telecommunication, digital or IT 
device  which  do  not  result  in  a  credit  transfer  or  direct  debit.  To  promote  competition  and 
efficiency,  the  Regulation  should  not  foreclose  from  the  market  non-'traditional'  payment 
schemes,  in  particular  when  they  are  based  on  combined  schemes  rules  including  a  direct 
debit  or  credit  transfer  segment.  Hence,  the  provisions  of  this  Regulation  only  apply  to  the 
credit transfer or direct debit underlying the transaction. 

Article  2  –  definitions  –  aligned,  as  much  as  possible,  with  those  used  in  Directive 
2007/64/EC. However, given the Regulation’s limited scope in comparison with the Payment 
Services Directive, some of the definitions have been tailored to the needs of this proposal. 

Article  3  –  reachability  of  payment  service  providers  for  credit  transfer  transactions  is 
integrated  with  the  reachability  obligation  for  direct  debit  transactions  under  Article 8  of 
Regulation (EC) No 924/2009. 

Article  4  –  technical  interoperability  –  which  is  necessary  for  the  smooth  functioning  of 
payment  schemes  and  systems,  so  that  they  can  interact  with  each  other  across  the  Union 
using  the  same  standards,  without  technical  obstacles  to  the  processing  of  payments  by  the 
market players. 

Article  5  and  the  Annex  –  technical  requirements  for  credit  transfer  and  direct  debit 
transactions  –  introduce  deadlines  for  migration  to  Union-wide  instruments,  by  making 
certain  important  standards  used  by  the  payment  industry  mandatory  and  defining  technical 
requirements applying to both payment service providers and customers. 

Article 6 – interchange fees for direct debit transactions – clarifies that after 31 October 2012 
multilateral  interchange  fees  (MIFs)  per  transaction  are  not  allowed  for  national  and 
cross-border direct debits. It also defines general conditions for interchange fees (multilateral, 
bilateral  and  unilateral)  for  R-transactions,  in  line  with  the  working  document  on  the 
'Applicability  of  Article  81  of  the  EC  Treaty  to  multilateral  interbank-payments  in  SDD' 
published by the Commission on 3 November 2009. 

Article 7 – waiver – applies to so-called 'legacy' niche products which should also be phased 
out after an appropriate transitional period. 

Article 8 – payment accessibility ensures that if a euro credit transfer or a euro direct debit is 
accepted domestically, it will also be used to and from a euro account on a cross-border basis. 

Article  9  –  competent  authorities  –  empowers  the  competent  authorities  to  take  necessary 
measures to ensure compliance with the obligations laid down in this Regulation. 

EN 

10 

   EN 

Article  10  –  penalties  –  requires  Member States  to  provide  details  of  penalties  to  the 
Commission. 

Article 11 – out-of-court complaints and redress procedures – obliges Member States to set up 
out-of-court redress bodies for the settlement of disputes arising under the Regulation. It also 
requires them to provide the Commission with information on these arrangements. 

Article  12  to  15  –  adoption  of  delegated  acts  –  allows  the  technical  requirements  to  be 
updated. 

Article 16 – revision clause – provides for a reporting obligation accompanied, if need be, by 
a proposal for amendment. 

Article  17  –  transitional  provisions  –  ensures  that  the  end-dates  apply  to  euro area 
Member States  earlier,  while  non-euro area  Member States  are  granted  a  transitional  period, 
based on their limited euro payment transaction volumes. 

EN 

11 

   EN 

2010/0373 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing technical requirements for credit transfers and direct debits in euros and 
amending Regulation (EC) No 924/2009 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission10, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Economic and Social Committee11, 

Having regard to the opinion of the Committee of the Regions12, 

Having regard to the opinion of the European Central Bank13, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

'SEPA')  project  aims 

The  creation of  an integrated market for electronic payments in euros, with no basic 
distinction  between  national  and  cross-border  payments  is  necessary  for  the  proper 
functioning  of  the  Internal  Market.  To  this  end,  the  Single  Euro  Payments  Area 
(hereinafter 
to  develop  common  Union-wide  payment 
instruments  to  replace  current  national  payment  instruments.  As  a  result  of  the 
introduction  of  open,  common  payment  standards,  rules  and  practices,  and  through 
integrated  payment  processing,  SEPA  should  provide  Union  citizens  and  businesses 
with  secure,  competitively  priced,  user-friendly,  and  reliable  payment  services  in 
euros.  Completing  SEPA  should  also  create  favourable  conditions  for  increased 
competition  in  payment  services  and  for  the  unhindered  development  and  swift, 
Union-wide  implementation  of  payments-related  innovations.  Consequently,  as 
a result  of  improved  economies  of  scale,  increased  operating  efficiency  and 
strengthened competition, electronic payment services in euros should create a best-of-
breed  basis  downward  price  pressure.  The  effects  of  this  should  be  significant,  in 

10 
11 
12 
13 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 

EN 

12 

   EN 

                                                 
particular  in  Member  States  where  payments  are,  comparatively  speaking,  relatively 
expensive.  The  transition  to  SEPA  should  therefore  not  be  accompanied  by  overall 
price increases for payment service users in general and for consumers, in particular. 

The success of SEPA is very important economically, monetarily as well as politically. 
It is fully in line with the Europe 2020 strategy which aims at a smarter economy in 
which  prosperity  results  from  innovation  and  from  more  efficient  use  of  available 
resources.  Both  the  European  Parliament  through  its  resolutions  of  12  March  200914 
and  10  March  201015  on  the  implementation  of  SEPA  and  the  Council  in  its 
conclusions  adopted  on  2  December  200916  have  underlined  the  importance  of 
achieving rapid migration to SEPA. 

the  Council  of 
Directive  2007/64/EC  of 
13 November 2007  on  payment  services  in  the  internal  market17  provides  a  modern 
legal foundation for the creation of an internal market for payments for which SEPA is 
a fundamental element. 

the  European  Parliament  and  of 

Regulation  (EC)  No  924/2009  of  the  European  Parliament  and  of  the  Council  of 
16 September 2009  on  cross-border  payments  in  the  Community  and  repealing 
Regulation (EC) No 2560/200118 also provides a number of facilitating measures for 
the  success  of  SEPA  such  as  the  extension  of  the  principle  of  equal  charges  to 
cross-border direct debits. 

In addition, self-regulatory efforts of the European banking sector through the SEPA 
initiative  have  not  proven  sufficient  to  drive  forward  concerted  migration  to  Union-
wide  schemes  for  credit  transfers  and  direct  debits  on  both  the  supply  and  demand 
sides.  Moreover,  this  self-regulatory  process  has  not  been  subject  to  appropriate 
governance  mechanisms,  which  may  partly  explain  the  slow  uptake  on  the  demand 
side.  Only  rapid  and  comprehensive  migration  to  Union-wide  credit  transfers  and 
direct debits will generate the full benefits of an integrated payments market, so that 
the  high  costs  of  running  both  'legacy'  and  SEPA  products  in  parallel  can  be 
eliminated. 

Rules should therefore be laid down to cover the execution of all credit transfers and 
direct  debit  transactions  denominated  in  euros  within  the  Union.  However,  it  is  not 
appropriate at this stage to cover card transactions, since common standards for Union 
card  payments  are  still  under  development.  Money  remittance,  internally  processed 
payments,  large-value  payment  transactions  between  payment  service  providers  and 
payments via mobile phone should not fall under the scope of those rules since these 
payment services are not comparable to credit transfers and direct debits. 

Several payment instruments currently exist, mostly for payments through the internet, 
which also use the international banc account number (IBAN) and the bank identifier 
code (BIC) and are based on credit transfers or direct debits but which have additional 
features. Those schemes are foreseen to expand beyond their current national borders 

P6_TA(2009)0139 
P7_TA(2010)0057 
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/111670.pdf 
OJ L 319, 5.12.2007, p. 1. 
OJ L 266, 9.10.2009, p. 11. 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

14 
15 
16 
17 
18 

EN 

13 

   EN 

                                                 
(8) 

(9) 

(10) 

and  could  fulfil  a  consumer  demand  for  innovative,  safe  and  cheap  payment 
instruments. In order not to foreclose such schemes from the market, the regulation on 
end dates for direct debit and credit transfer should only apply to the credit transfer or 
direct debit underlying the transaction. 

For a credit transfer to be executed, the payee’s account must be reachable. Therefore, 
in  order  to  encourage  the  successful  take-up  of  these  payment  instruments, 
a reachability obligation should be established Union-wide. To improve transparency, 
it  is  furthermore  appropriate  to  consolidate  that  obligation  and  the  reachability 
obligation for direct debits already established under Regulation (EC) No 924/2009 in 
one single act. 

Technical  interoperability  is  a  prerequisite  for  competition.  In  order  to  create 
an integrated market for electronic payments systems in euros, it is essential that the 
processing of credit transfers and direct debits are not hindered by technical obstacles 
and are carried out under a scheme whose basic rules are adhered to by a majority of 
payment  services  providers  from  a  majority  of  Member  States  and  be  the  same  both 
for  cross-border  and  for  purely  national  credit  transfer  and  direct  debit  transactions. 
Where  more  than  one  such  scheme  is  developed  or  where  there  is  more  than  one 
payment  system  for  the  processing  of  such  payments,  these  schemes  and  systems 
should be interoperable so that all users and payment service providers can enjoy the 
benefits of seamless euro payments across the Union. 

It  is  crucial  to  identify  technical  requirements  which  unambiguously  determine  the 
features  which  Union-wide  payment  schemes  to  be  developed  under  appropriate 
governance  arrangements  have  to  respect  in  order  to  ensure  inter-operability.  Such 
technical requirements should not restrict flexibility and innovation but should be open 
to and neutral towards potential new developments and improvements in the payments 
market.  They  should  be  designed  taking  into  account  the  special  characteristics  of 
credit  transfers  and  direct  debits,  in  particular  with  regard  to  the  data  elements 
contained  in  the  payment  message.  They  should  also  contain,  especially  for  direct 
debits,  measures  to  strengthen  the  confidence  of  payment  service  users  in  the  use  of 
such instruments. 

(11)  Technical standardisation is a cornerstone for the integration of networks, such as the 
Union payments market. The use of standards developed by international or European 
standardisation  bodies  should  be  mandatory  as  of  a  given  date  for  all  relevant 
transactions. In the payment context, these would be the IBAN, BIC, and the financial 
services  messaging  standard  'ISO 20022  XML'.  The  use  of  those  standards  by  all 
payment  service  providers  is  therefore  a  requirement  for  full  interoperability 
throughout  the  Union.  In  particular,  the  mandatory  use  of  IBAN  and  BIC  where 
necessary should be promoted through comprehensive communication and facilitating 
measures  in  Member  States  in  order  to  allow  a  smooth  and  easy  transition  to  pan-
European credit transfers and direct debits, in particular for consumers. 

(12) 

It is appropriate to set dates by when all credit transfers and direct debit transactions 
should  comply  with  those  technical  requirements,  while  leaving  the  market  open  for 
further development and innovation. 

(13)  Separate  migration  dates  should  be  set  in  order  to  take  into  account  the  differences 
between credit transfers and direct debits. Union-wide credit transfers and direct debits 

EN 

14 

   EN 

do  not  have  the  same  level  of  maturity,  since  a  direct  debit  is  a  more  complex 
instrument  than  a  credit  transfer  and,  consequently,  migration  to  Union-wide  direct 
debits  requires  significantly  more  resources  than  migration  to  Union-wide  credit 
transfers. 

(14)  Regulation of multilateral interchange fees (MIF) for direct debits is essential to create 
neutral  conditions  of  competition  between  the  payment  service  providers  and  so  to 
permit  the  development  of  a  single  market  for  direct  debits.  Per  transaction  MIF  for 
direct  debit  restrict  competition  between  payees  banks  and  inflate  the  charges  such 
banks impose on payees and thus lead to hidden price increases to payers. Whilst no or 
limited  objective  efficiencies  have  been  demonstrated  for  per  transaction  MIF,  such 
fees  for  transactions  which  are  rejected,  refused,  returned  or  reversed  because  they 
cannot  be  properly  executed  (R-transactions)  could  help  to  allocate  costs  efficiently 
within the single market. Therefore, it would appear beneficial for the creation of an 
effective European direct debit market to prohibit per transaction MIF. Nevertheless, 
R-transaction should be allowed, provided that they comply with certain conditions. In 
any event, rules should be without prejudice to the application of Articles 101 and 102 
of the TFEU to multilateral interchange fees for R-transactions. 

(15)  Therefore,  the  possibility  to  apply  per  transaction  MIF  for  national  and  cross-border 
direct debits should be limited in time and general conditions should be laid down for 
the application of interchange fees for R-transactions. 

(16) 

In some Member States, there are certain legacy payment instruments which are credit 
transfers  or  direct  debits  but  which  have  very  specific  functionalities,  often  due  to 
historical  or  legal  reasons.  The  transaction  volume  of  such  products  is  usually 
marginal; they could therefore be classified as niche products. A transitional period for 
such  niche  products,  sufficiently  long  to  minimise  the  impact  of  the  migration  on 
payment  service  users,  should  help  both  sides  of  the  market  to  focus  first  on  the 
migration  of  the  bulk  of  credit  transfers  and  direct  debits,  thereby  allowing  the 
majority of the potential benefits of an integrated payments market in the Union to be 
reaped earlier. 

(17)  For the practical functioning of the internal market in payments it is essential to ensure 
that payers such as businesses or public authorities are able to send credit transfers to 
payment  accounts  held  by  the  payees  with  payment  service  providers  which  are 
located in other Member States and reachable in accordance with this Regulation. 

(18)  Competent  authorities  should  be  empowered  to  fulfil  their  monitoring  duties 
efficiently and to take all necessary measures to ensure that payment service providers 
comply with this Regulation. 

(19) 

(20) 

It  is  necessary  that  Member States  lay  down  effective,  proportionate  and  dissuasive 
penalties in national law for failure to comply with this Regulation. 

In order to ensure that redress is possible where this Regulation has been incorrectly 
applied, Member States should establish adequate and effective out-of-court complaint 
and redress procedures for settling any dispute arising therefrom. 

(21) 

It  is  desirable  that  the  Commission  present  a  report  on  the  effectiveness  of  the 
provisions of this Regulation. 

EN 

15 

   EN 

(22)  The  Commission  should  be  empowered  to  adopt  delegated  acts  in  accordance  with 
Article  290  of  the  Treaty  in  respect  of  the  update  of  the  technical  requirements  for 
credit transfers and direct debits. 

(23)  Since  payment  service  providers  from  Member States  outside  the  euro area  would 
need to undertake more preparatory work, such payment service providers should be 
allowed to defer the application of these technical requirements for a certain period. 

(24) 

In  order  to  enhance  legal  security  it  is  appropriate  to  align  the  deadlines  for 
interchange fees set out in Articles 6 and 7 of Regulation (EC)°No 924/2009 with the 
provisions laid down in this Regulation. 

(25)  Regulation (EC)° No 924/2009 should be amended accordingly. 

(26)  Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 
on the protection of individuals with regard to the processing of personal data and on 
the free movement of such data19 governs the processing of personal data carried out 
pursuant to this Regulation. 

(27)  Financial  messages  relating  to  payments  and  transfers  in  the  SEPA  are  outside  the 
scope  of  the  EU-US  Agreement  of  8  July  2010  on  the  processing  and  transfer  of 
Financial  Messaging  Data  for  the  purposes  of  the  Terrorist  Finance  Tracking 
Program20. 

(28)  Since  the  objectives  of  this  Regulation  cannot  be  sufficiently  achieved  by  the 
Member States  and  can  therefore,  by  reason  of  the  scale  or  effects  of  the  action,  be 
better achieved at Union level, the Union may adopt measures in accordance with the 
principle of subsidiarity as set out in Article 5 of the Treaty on the European Union. In 
accordance  with  the  principle  of  proportionality,  as  set  out  in  that  Article,  this 
Regulation does not go beyond what is necessary in order to achieve those objectives, 

HAVE ADOPTED THIS REGULATION: 

Article 1 
Subject matter and scope 

1. 

This Regulation lays down rules for the execution of credit transfer and direct debit 
transactions denominated in euros within the Union where both the payer’s payment 
service  provider  and  the  payee’s  payment  service  provider  are  situated  within  the 
Union,  or  where  the  sole  payment  service  provider  in  the  payment  transaction  is 
located in the Union. 

2. 

This Regulation shall not apply to the following: 

(a) 

payment transactions carried out internally within payment service providers as 
well as payment transactions between payment service providers for their own 
account 

19 
20 

OJ L 281, 23.11.1995, p. 31. 
OJ L 195, 27.7.2010, p. 1. 

EN 

16 

   EN 

                                                 
(b)  payment  transactions  processed  and  settled  through  large  value  payment 
systems  for  which  both  the  original  initiator  and  the  final  recipient  of  the 
payment is a payment service provider 

(c) 

payment transactions through a payment card, including cash withdrawals from 
a payment account, if they do not result in a credit transfer or direct debit to or 
from a payment account identified by the basic bank account number (BBAN) 
or the international banc account number (IBAN) 

(d)  payment  transactions  through  means  of  any  telecommunication,  digital  or  IT 
device,  if  they  do  not  result  in  a  credit  transfer  or  direct  debit  to  or  from 
a payment account identified by BBAN or IBAN 

(e)  money remittance transactions where funds are received from a payer, without 
any payment accounts being created in the name of the payer or the payee, for 
the  sole  purpose  of  transferring  a  corresponding  amount  to  a  payee  or  to 
another payment service provider acting on behalf of the payee, and/or where 
such funds are received on behalf of and made available to the payee. 

3. 

Where  payment  schemes  are  based  on  payment  transactions  by  credit  transfers  or 
direct  debits  but  have  additional  features,  this  Regulation  shall  apply  only  to  the 
underlying credit transfers or direct debits. 

Article 2 
Definitions 

For the purposes of this Regulation, the following definitions shall apply: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

'credit  transfer'  means  a  payment  service  for  crediting  a  payee’s  payment  account, 
where  a  payment  transaction  or  a  series  of  payment  transactions  is  initiated  by  the 
payer on the basis of the consent given to his payment service provider 

'direct debit' means a payment service for debiting a payer’s payment account, where 
a payment transaction is initiated by the payee on the basis of the payer’s consent 

'payer'  means  a  natural  or  legal  person  who  holds  a  payment  account  and  allows 
a payment order from that payment account 

'payee'  means  a  natural  or  legal  person  who is the intended recipient of funds which 
have been the subject of a payment transaction 

'payment account' means an account held in the name of one or more payment service 
users which is used for the execution of payment transactions 

'payment  system'  means  a  funds  transfer  system  with  formal  and  standardised 
arrangements  and  common  rules  for  the  processing,  clearing  and/or  settlement  of 
payment transactions 

'payment scheme' means a set of rules, practices and standards for making payments 
between  the  scheme  participants,  and  which  is  separated  from  any  infrastructure  or 
payment system that supports its operation across and within Member States 

EN 

17 

   EN 

(8) 

(9) 

(10) 

(11) 

(12) 

(13) 

(14) 

(15) 

(16) 

(17) 

'payment  service  provider'  means  any  of  the  categories  referred  to  in  Article 1(1)  of 
Directive 2007/64/EC and the legal and natural persons referred to in Article 26 of that 
Directive, but excludes those institutions listed in Article 2 of Directive 2006/48/EC of 
the European Parliament and of the Council21 benefiting from a Member State waiver 
exercised under Article 2(3) of Directive 2007/64/EC 

'payment  service  user'  means  a  natural  or  legal  person  making  use  of  a  payment 
service in the capacity of either payer or payee, or both 

'payment  transaction'  means  an  act,  initiated  by  the  payer  or  by  the  payee  of 
transferring  funds,  irrespective  of  any  underlying  obligations  between  the  payer  and 
the payee 

'payment  order'  means  any  instruction  by  a  payer  or  payee  to  his  payment  service 
provider requesting the execution of a payment transaction 

'interchange fee' means a fee paid between the payment service providers of the payer 
and of the payee for each direct debit transaction 

'multilateral interchange fee' means an interchange fee which is subject to a collective 
agreement between payment service providers 

'BBAN'  means  a  payment  account  number  identifier,  which  uniquely  identifies 
an individual account with a payment service provider in a Member State and can only 
be used for national transactions 

'IBAN'  means  an  international  payment  account  number  identifier,  which  uniquely 
identifies  an  individual  account  with  a  unique  payment  service  provider  in 
a Member State,  the  elements  of  which  are  specified  by  ISO  13616,  set  by  the 
International Organization for Standardisation (ISO) 

'BIC'  means  a  code  that  unambiguously  identifies  a  payment  service  provider,  the 
elements of which are specified by ISO 13616, set by the International Organization 
for Standardisation (ISO) 

'ISO  20022  XML  standard'  means  a  standard  for  the  development  of  electronic 
financial  messages  as  defined  by  the  International  Organisation  for  Standardisation 
(ISO), encompassing the physical representation of the payment transactions in XML 
syntax,  in  accordance  with  business  rules  and  implementation  guidelines  of  Union-
wide schemes for payment transactions in scope of this Regulation. 

Article 3 
Reachability 

A  payment  service  provider  reachable  for  a  national  credit  transfer  or  a  direct  debit 
transaction, or both  denominated in euro on a  given payment account shall be reachable, in 
accordance  with  the  rules  of  the  payment  scheme,  for  credit  transfer  and  direct  debit 
transactions initiated through a payment service provider located in any Member State. 

21 

OJ L 177, 30.6.2006, p. 1. 

EN 

18 

   EN 

                                                 
Article 4 
Interoperability 

1. 

Payment  service  providers  shall  carry  out  credit  transfers  and  direct  debits  under  a 
payment scheme which complies with the following conditions: 

(a) 

(b) 

its  rules  are  the  same  for  national  and  cross-border  credit  transfer  and  direct 
debit transactions across and within Member States 

the  participants  in  the  scheme  represent  a  majority  of  payment  service 
providers within a majority of Member States. 

Payment  systems  and,  where  applicable,  payment  schemes  shall  be  technically 
interoperable  through  the  use  of  standards  developed  by  international  or  European 
standardisation bodies. 

The processing of credit transfers and direct debits shall not be hindered by technical 
obstacles. 

Article 5 
Requirements for credit transfer and direct debit transactions 

By  [insert  concrete  date  12  months  after  entry  into  force  of  this  Regulation]  at  the 
latest,  credit  transfers  shall  be  carried  out  in  accordance  with  the  technical 
requirements set out in points 1 and 2 of the Annex. 

By  [insert  concrete  date  24  months  after  entry  into  force  of  this  Regulation]  at  the 
latest, direct debits shall be carried out in accordance with Article 6 and the technical 
requirements set out in points 1 and 3 of the Annex. 

Notwithstanding paragraphs 1 and 2, Member States may set earlier dates than those 
referred to in paragraphs 1 and 2. 

The  Commission  may  amend  the  Annex  in  order  to  take  account  of  technical 
progress  and  market  developments.  Those  measures  shall  be  adopted  by  means  of 
delegated acts in accordance with the procedure laid down in Article 12. 

Article 6 
Interchange fees for direct debit transactions 

Without  prejudice  to  paragraph  2,  no  multilateral  interchange  fee  per  direct  debit 
transaction  or  other  agreed  remuneration  with  an  equivalent  object  or  effect  shall 
apply to direct debit transactions. 

For direct debit transactions which cannot be properly executed by a payment service 
provider  because  the  payment  order  is  rejected,  refused,  returned  or  reversed 
(R-transactions) carried out by payment service providers, a multilateral interchange 
fee may be applied provided that the following conditions are complied with: 

2. 

3. 

1. 

2. 

3. 

4. 

1. 

2. 

EN 

19 

   EN 

(a) 

the arrangement shall be aimed at efficiently allocating costs to the party that 
has  caused  the  R-transaction,  while  taking  into  account  the  existence  of 
transaction costs and the aim of consumer protection 

(b) 

the fees shall be strictly cost based 

(c) 

(d) 

the  level  of  the  fees  shall  not  exceed  the  actual  costs  of  handling  an 
R-transaction by the most cost-efficient comparable payment service provider 
that is a representative party to the multilateral arrangement in terms of volume 
of transactions and nature of services 

the  application  of  the  fees  in  accordance  with  points  (a),  (b)  and  (c)  shall 
prevent the payment service providers to charge additional fees related to the 
costs  covered  by  these  interchange  fees  to  their  respective  payment  service 
users 

(e) 

there must be no practical and economically viable alternative to the collective 
agreement  which  would  lead  to  an  equally  or  more  efficient  handling  of 
R-transactions at equal or lower cost to consumers. 

For  the  purposes  of  the  first  subparagraph,  only  cost  categories  directly  and 
unequivocally relevant to the handling of the R-transaction shall be considered in the 
calculation of the R-transaction fees. These costs shall be precisely determined. The 
breakdown of the amount of the costs, including separate identification of each of its 
components, shall be part of the collective agreement to allow for easy verification 
and monitoring. 

Paragraph 1 and the conditions set out in points (a), (b) and (d) of paragraph 2 shall 
apply also to bilateral and unilateral arrangements that have an equivalent object or 
effect. 

Article 7 
Waiver 

Member States  may  allow  their  competent  authorities  to  waive  all  or  some  of  the 
requirements set out in paragraphs 1, 2 and 3 of Article 5 until [insert concrete date 
36 months after entry into force of this Regulation] for those credit transfer or direct 
debit  transactions  with  a  cumulative  market  share,  based  on  the  official  payment 
statistics published annually by the European Central Bank, of less than 10 % of the 
total  number  of  credit  transfer  or  direct  debit  transactions  respectively,  in  that 
Member State. 

Member States  may  allow  their  competent  authorities  to  waive  all  or  some  of  the 
requirements set out in paragraphs 1, 2 and 3 of Article 5 until [insert concrete date) 
60  months  after  entry  into  force  of  this  Regulation]  for  those  payment  transactions 
initiated through a payment card at the point of sale which result in direct debit from 
a payment account identified by BBAN or IBAN. 

Where a Member State allows its competent authorities to apply the waiver provided 
for  in  paragraphs  1  and  2,  it  shall  notify  the  Commission  accordingly  by  [insert 

3. 

1. 

2. 

3. 

EN 

20 

   EN 

concrete date 6 months after entry into force of this Regulation]. The Member State 
shall notify the Commission forthwith of any subsequent change. 

Article 8 
Payment accessibility 

A payer using credit transfers to transfer funds from his or her payment account to 
other  payment  accounts  with  payment  service  providers  located  in  the  same 
Member State  shall  not  refuse  to  make  credit  transfers  to  payment  accounts  with 
payment service providers which are located in another Member State and reachable 
in accordance with Article 3. 

A  payee  using  direct  debits  to  receive  funds  on  his  or  her  payment  account  from 
other  payment  accounts  with  payment  service  providers  located  in  the  same 
Member State  shall  not  refuse  to  receive  direct  debits  from  payment  accounts  with 
payment service providers which are located in another Member State and reachable 
in accordance with Article 3. 

Article 9 
Competent authorities 

Member States shall designate as the competent authorities responsible for ensuring 
compliance  with  this  Regulation  either  public  authorities,  or  bodies  recognised  by 
national  law  or  by  public  authorities  expressly  empowered  for  that  purpose  by 
national law, including national central banks. Member States may designate existing 
bodies to act as competent authorities. 

Member States shall notify the Commission of the competent authorities referred to 
in  paragraph  1  by  [insert  concrete  date  6  months  after  entry  into  force  of  this 
Regulation].  They  shall  notify  the  Commission  without  delay  of  any  subsequent 
change concerning those authorities. 

Member States shall ensure that the competent authorities referred to in paragraph 1 
have  all  the  powers  necessary  for  the  performance  of  their  duties.  Where  there  is 
more  than  one  competent  authority  for  matters  covered  by  this  Regulation  on  its 
territory, Member States shall ensure that those authorities cooperate closely so that 
they can discharge their respective duties effectively. 

The competent authorities shall monitor compliance with this Regulation effectively 
and take all necessary measures to ensure such compliance. 

1. 

2. 

1. 

2. 

3. 

4. 

Article 10 
Penalties 

Member States  shall,  by  [insert  concrete  date  6  months  after  entry  into  force  of  this 
Regulation],  lay  down  rules  on  the  penalties  applicable  to  infringements  to  this  Regulation 
and  shall  take  all  measures  necessary  to  ensure  that  they  are  implemented.  Such  penalties 
shall be effective, proportionate and dissuasive. Member States shall notify the Commission 
of  those  provisions  by  [insert  concrete  date  12  months  after  entry  into  force  of  this 
Regulation] and shall notify it without delay of any subsequent amendment affecting them. 

EN 

21 

   EN 

1. 

2. 

1. 

2. 

3. 

1. 

2. 

3. 

Article 11 
Out-of-court complaint and redress procedures  

Member  States  shall  establish  adequate  and  effective  out-of-court  complaint  and 
redress  procedures  for  the  settlement  of  disputes  arising  under  this  Regulation 
between  payment  service  users  and  their  payment  service  providers.  For  those 
purposes, Member States shall designate existing bodies, where appropriate, or set up 
new bodies. 

Member States shall notify the Commission of the bodies referred to in paragraph 1 
by  [insert  concrete  date  6  months  after  entry  into  force  of  this  Regulation].  They 
shall  notify  the  Commission  without  delay  of  any  subsequent  change  concerning 
those bodies. 

Article 12 
Exercise of delegated powers 

The powers to adopt the delegated acts referred to in Article 5(4) shall be conferred 
on the Commission for an indeterminate period of time. Where imperative grounds 
of urgency so require, Article 15 shall apply. 

As soon as it adopts a delegated act, the Commission shall simultaneously notify the 
European Parliament and the Council of that act. 

The powers to adopt delegated acts are conferred on the Commission subject to the 
conditions laid down in Articles 13 and 14. 

Article 13 
Revocation of the delegation 

The delegation of power referred to in Article 5(4) may be revoked at any time by 
the European Parliament or by the Council. 

The institution which has commenced an internal procedure for deciding whether to 
revoke the delegation of power shall endeavour to inform the other institution and the 
Commission  within  a  reasonable  time  before  the  final  decision  is  taken,  indicating 
the  delegated  powers  which  could  be  subject  to  revocation  and  the  reasons  for  a 
revocation. 

The decision of revocation shall put an end to the delegation of the powers specified 
in that decision. It shall take effect immediately or at a later date specified therein. It 
shall  not  affect  the  validity  of  the  delegated  acts  already  in  force.  It  shall  be 
published in the Official Journal of the European Union. 

EN 

22 

   EN 

1. 

2. 

3. 

1. 

2. 

Article 14 
Objections to delegated acts 

The  European  Parliament  and  the  Council  may  object  to  the  delegated  act  within 
a period of two months from the date of notification. At the initiative of the European 
Parliament or the Council this period shall be extended by one month. 

If,  on  expiry  of  that  period,  neither  the  European  Parliament  nor  the  Council  has 
objected  to  the  delegated  act,  it  shall  be  published  in  the  Official  Journal  of  the 
European Union and shall enter into force on the date stated in its provisions. 

The  delegated act may be  published in the Official  Journal  of the European Union 
and enter into force before the expiry of that period if the European Parliament and 
the  Council  have  both  informed  the  Commission  of  their  intention  not  to  raise 
objections. 

If  the  European  Parliament  or  the  Council  objects  to  the  adopted  delegated  act,  it 
shall  not  enter  into  force.  The  institution  which  objects  shall  state  the  reasons  for 
objecting to the delegated act. 

Article 15 
Urgency procedure 

A delegated act adopted under the urgency procedure shall enter into force without 
delay  and  apply  as  long  as  no  objection  is  expressed  in  accordance  with  paragraph 
2.The notification of the act to the European Parliament and to the Council shall state 
the reasons for the use of the urgency procedure. 

The European Parliament and the Council may within a period of six weeks from the 
date of notification object to the delegated act. In such a case, the act shall cease to 
be  applicable.  The  institution  which  objects  shall  state  the  reasons  for  objecting  to 
the delegated act. 

Article 16 
Review 

By [insert concrete date 3 years after entry into force], the Commission shall present to the 
European  Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
European  Central  Bank  a report  on  the  application  of  this  Regulation  accompanied,  if 
appropriate, by a proposal. 

Article 17 
Transitional provisions 

1. 

Payment service providers located in a Member State which does not have the euro 
as its currency shall comply with Article 3 by 31 October 2014. If, however, the euro 
is introduced as the currency of any such Member State before 1 November 2013, the 
payment service  provider  located  in that Member State shall comply with Article 3 

EN 

23 

   EN 

within  one  year  of  the  date  on  which  the  Member State  concerned  joined  the 
euro area. 

2. 

Payment service providers located in a Member State which does not have the euro 
as its currency shall comply with the requirements set out in Article 4 and in points 1 
and  2  of  the  Annex  for  credit  transfers  denominated  in  euros  and  with  the 
requirements set out in Article 4 and in points 1 and 3 of the Annex for direct debit 
transactions denominated in euros by [insert concrete date month) 4 years after entry 
into force of this Regulation]. If, however, the euro is introduced as the currency of 
any such Member State before [insert concrete date 3 years after entry into force of 
this  Regulation],  the  payment  service  provider  located  in  that  Member State  shall 
meet  those  requirements  within  one  year  of  the  date  on  which  the  Member State 
concerned joined the euro area. 

Article 18 
Amendment of Regulation (EC) No 924/2009 

Regulation (EC) No 924/2009 is amended as follows: 

1. 

2. 

In Article 6 and the words, "before 1 November 2012" are replaced by the following: 
"before [insert concrete date 24 months after entry into force of this Regulation]". 

Article 7 is amended as follows: 

(a) 

(b) 

(c) 

in  paragraph  1,  the  words  "before  1 November 2012"  are  replaced  by  the 
following: "before [insert concrete date 24 months after entry into force of this 
Regulation]". 

in  paragraph  2,  the  words  "before  1 November 2012"  are  replaced  by  the 
following: "before [insert concrete date 24 months after entry into force of this 
Regulation]". 

in  paragraph  3,  the  words  "before  1 November 2012"  are  replaced  by  the 
following: "before [insert concrete date 24 months after entry into force of this 
Regulation]". 

3. 

Article 8 is deleted. 

Article 19 
Entry into force 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

EN 

24 

   EN 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

25 

   EN 

ANNEX 
TECHNICAL REQUIREMENTS (ARTICLE 5) 

(1) 

The  following  technical  requirements  shall  apply  to  both  credit  transfer  and  direct 
debit transactions: 

(a) 

Payment  service  providers  and  payment  service  users  shall  use  the  IBAN  for 
the  identification  of payment  accounts regardless  of  whether  both  the  payer’s 
payment service provider and the payee’s payment service provider are or the 
sole  payment  service  provider  in  the  payment  transaction  is,  located  in  the 
same Member State or whether one of the payment service providers is located 
in another Member State. 

(b) 

Payment  service  providers  shall  use  message  formats  based  on  ISO  20022 
XML  standard  when  transmitting  payment  transactions  to  another  payment 
service provider or a payment system. 

(c)  Where a payment service user initiates or receives individual transfers of funds 
which  are  bundled  together  for  transmission,  message  formats  based  on  ISO 
20022 XML standard shall be used. 

(d) 

(e) 

(f) 

(g) 

(h) 

The remittance data field shall allow for 140 characters. Payment schemes may 
allow  for  a  higher  number  of  characters,  except  if  the  device  used  to  remit 
information  has  technical  limitations  related  to  the  number  of  characters,  in 
which case the technical limit of the device shall apply. 

Remittance  reference  information  and  all  the  other  data  elements  provided  in 
accordance  with  points  2  and  3  of  this  Annex,  shall  be  passed  in  full  and 
without alteration between payment service providers throughout the payment 
chain. 

Once data is available in electronic form payment transactions must allow for 
a fully  automated,  electronic  processing  in  all  process  stages  throughout  the 
payment  chain  (end-to-end  straight  through  processing),  enabling  the  entire 
payment process to be conducted electronically without the need for re-keying 
or manual intervention. This shall also apply to exceptional handling of credit 
transfer and direct debit transactions, whenever possible. 

Payment  schemes  shall  not  set  any  minimum  threshold  for  the  amount  of  the 
payment transaction allowing for credit transfers and direct debits. 

Payment  schemes  shall  not  be  obliged  to  carry  out  credit  transfers  and  direct 
debits exceeding the amount of EUR 999 999 999,99. 

(2) 

In  addition  to  the  requirements  referred  to  in  point  (1),  the  following  requirements 
shall apply to credit transfer transactions: 

(a) 

A payee accepting credit transfers shall communicate its IBAN and the BIC of 
its  payment  service  provider  to  its  payers,  every  time  a  credit  transfer  is 
requested. 

EN 

26 

   EN 

(b) 

The following mandatory data elements shall be provided by the payer to his or 
her payment service provider and passed along the payment chain to the payee 
in accordance with the obligations laid down in the national law implementing 
Directive 95/46/EC: 

(i) 

the name of the payer and/or the IBAN of the payer’s account 

(ii) 

the amount of the credit transfer 

(iii) 

the IBAN of the payee’s account 

(iv) 

the name of the payee 

(v) 

the remittance information, if any. 

(c) 

In  addition,  the  following  mandatory  data  elements  shall  be  provided  by  the 
payer’s payment service provider to the payee’s payment service provider: 

(i) 

the BIC of the payer’s payment service provider (if not agreed otherwise 
by the payment service providers involved in the payment transaction) 

(ii) 

the BIC of the payee’s payment service provider (if not agreed otherwise 
by the payment service providers involved in the payment transaction) 

(iii) 

the identification code of the payment scheme 

(iv) 

the settlement date of the credit transfer 

(v) 

the  payer’s  payment  service  provider  reference  number  of  the  credit 
transfer message. 

(3) 

In  addition  to  the  requirements  referred  to  in  point  (1),  the  following  requirements 
shall apply to direct debit transactions: 

(a) 

Only once before the first direct debit transaction, a payer shall communicate 
its IBAN and, where applicable, the BIC of its payment service provider to its 
payee. 

(b)  With the first direct debit transaction and one-off direct debit transactions and 
with  each  subsequent  direct  debit  transaction,  the  payee  shall  send  the 
mandate-related  information  to  his  or  her  payment  service  provider.  The 
payee’s  payment  service  provider  shall  transmit  such  mandate  related 
information  to  the  payer’s  payment  service  provider  with  each  direct  debit 
transaction. 

(c) 

A  payer  shall  have  the  possibility  to  instruct  his  or  her  payment  service 
provider to limit a direct debit collection to a certain amount or periodicity, or 
both. 

(d)  Where  the  agreement  between  the  payer  and  the  payee  excludes  the  right  to 
a refund,  the  payer’s  payment  service  provider  shall,  at  the  payer’s  request, 
check each direct debit transaction, to see whether the amount of the submitted 

EN 

27 

   EN 

(e) 

(f) 

direct  debit  transaction  is  equal  to  the  amount  agreed  in  the  mandate,  before 
debiting the payer’s account, based on the mandate-related information. 

The  payer  shall  have  the  option  of  instructing  his  or  her  payment  service 
provider to block any direct debits to the payer’s account or to block any direct 
debits coming from one or more specified payees or to authorise direct debits 
only coming from one or more specified payees. 

Consent shall be given both to the payee and to the payment service provider of 
the payer (directly or indirectly via the payee) and the mandates, together with 
later  modifications  and/or  cancellation,  shall  be  stored  by  the  payee  or  by 
a third party on behalf of the payee. 

(g) 

The following mandatory data elements shall be provided by the payee to his 
payment service provider and passed along the payment chain to the payer: 

(i) 

the type of direct debit (recurrent, one-off, first, last or reversal) 

(ii) 

the name of the payee 

(iii) 

the  IBAN  of  the  payment  account  of  the  payee  to  be  credited  for  the 
collection 

(iv) 

the name of the payer 

(v) 

the  IBAN  of  the  payment  account  of  the  payer  to  be  debited  for  the 
collection 

(vi) 

the unique mandate reference 

(vii)  the date of signing of the mandate 

(viii)  the amount of the collection 

(ix) 

the unique mandate reference as given by the original payee who issued 
the mandate (if the mandate has been taken over by another payee than 
the payee who issued the mandate) 

(x) 

the identifier of the payee 

(xi) 

the  identifier  of  the  original  payee  who  issued  the  mandate  (if  the 
mandate has been taken over by a payee other than the payee who issued 
the mandate) 

(xii)  the remittance information from the payee to the payer, if any. 

(h) 

In  addition,  the  following  mandatory  data  elements  shall  be  provided  by  the 
payee’s payment service provider to the payer’s payment service provider: 

(i) 

the  BIC  code  of  the  payee’s  payment  service  provider  (if  not  agreed 
otherwise  by  the  payment  service  providers  involved  in  the  payment 
transaction) 

EN 

28 

   EN 

(ii) 

the  BIC  code  of  the  payer’s  payment  service  provider  (if  not  agreed 
otherwise  by  the  payment  service  providers  involved  in  the  payment 
transaction) 

(iii) 

the  name  of  the  payer  reference  party  (if  present  in  dematerialised 
mandate) 

(iv) 

the  identification  code  of  the  payer  reference  party  (if  present  in 
dematerialised mandate) 

(v) 

the  name  of  the  payee  reference  party  (if  present  in  the  dematerialised 
mandate) 

(vi) 

the  identification  code  of  the  payee  reference  party  (if  present  in 
dematerialised mandate) 

(vii)  the identification code of the payment scheme 

(viii)  the settlement date of the collection 

(ix) 

the payee’s payment service provider’s reference for the collection 

(x) 

the type of mandate 

(xi) 

the due date for the collection. 

EN 

29 

   EN