Sepa will give customers greater control over banking
Sepa, the new Single Euro Payments Area regulatory initiative, will change the way we bank from February
“Whether it’s Munich or Mullingar, the money will be in the recipient’s account the next day. And the bank can’t charge 28 cent for the domestic payment and €2 for the Munich payment. The cost will be exactly the same.”
So while different banks can currently charge different fees for electronic transfers, under Sepa, they cannot charge more to transfer money within the 33-country area than it does for a domestic transfer. In fact, these charging structures are in regulation already ahead of the switchover, but next February will see the start to solidify across the zone.
Another Sepa feature is that when you receive an electronic euro payment, you must receive the full amount into your account, says Foley.
“Previously when you sent a cross-border payment, the receiving bank would deduct a fee for receiving that as an incoming foreign payment, but they can’t do that any more.” The sum will arrive intact into your account.
So what else does Sepa mean for Irish consumers? Well, for those with an overseas property who, till now, had been told they needed a bank account in that country from which to pay electricity or property management fees, they can now ditch that account.
“If you have a house in France and are required to pay a direct debit in France, traditionally you had to go to a French bank and open up a French bank account, get French online banking and a French bank statement, and all the costs that go with that,” Foley says .
“Under Sepa, for euro countries collecting euro, it will become mandatory from February 1st that they use the Sepa direct debit scheme to collect those.”
“So, if you go to Spain next year and decide to buy an apartment,” he adds, “you will have the capability to give your Irish bank account details and they will be able to collect direct debits from your Irish bank account.”
Pay into Irish account
The change will also bring ease to students or workers in the 33-country area who, under Sepa, will no longer be obliged to set up an in-country bank account. They can simply pay their bills from, or have their wages lodged to, their Irish bank account.
Of course, the reverse is also true. Students and workers from the 33-country area living in Ireland will no longer need to set up an Irish bank account, says AIB’s Vance.
“What was happening was that a Polish person working for an Irish company would have their wages paid into an Irish bank and then they might repatriate some of the money to their home account,” says Vance. “Now, workers can ask their employers to pay their wages into a foreign bank account.”
All going well, the changes should shake up the market, Rice says. “There’s nothing stopping you from paying your Irish electricity bill from an account in Portugal if you think the Portuguese bank is better value.