A proposed policy by the European Commission, the European Union’s executive arm, that would hasten migration to a Single Euro Area Payments system also may ban direct debit fees in 2012.
SEPA is an initiative the European banking industry launched in 2002 to link Europe’s disparate national payment systems into a standardized debit system usable for cross-border debit transactions.
The commission has revised the deadline for banks to support SEPA credit transfers and direct debits to the end of 2012 because banks were not able to meet the original December 2010 deadline.
The member EU states now must negotiate the proposal’s terms. Once the European Parliament approves the policy, it would become effective immediately.
The most recent draft for SEPA migration proposes that banks update their existing systems by the end of 2012. It also proposes to ban interchange fees on all national and cross-border direct debit transaction by October 2012, according to the commission.
The ban on interchange fees primarily would target France, Italy and Spain to cut bill costs for consumers and merchants. Banks in these and several other European Union countries charge billers such as utility companies a “hidden fee” for direct debit transactions, the commission said in a recent news release about SEPA’s deadline.
With regard to international debit bands, the commission in April agreed to accept proposed commitments from Visa Europe on its multilateral interchange rate for direct debit transactions (
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