Two pieces of legislation from the EU Commission are specifically targeted at progressing SEPA through standardized legislation across the SEPA countries. The first, Regulation 2560/2001/EU kick-started the SEPA initiative, and is fully in operation (even though sometimes ignored). The second, the proposed Payment Services Directive has been agreed by the EU finance ministers in March 2007, and should pass all stages soon.

Regulation 924/2009:
Regulation 924 replaces the previous regulation 2560  and regulates bank charges for electronic cross-border transactions (card transactions, credit transfers, direct debits) under €50,000, denominated in euro within Europe.  The charge for these transactions must not exceed the charge for a similar domestic transaction.

Proposed Payment Services Directive:

The Payment Services Directive is intended to harmonise legislation in relation to payment services across the 31 SEPA countries. The SEPA Direct Debit cannot be introduced in many countries until the Payment Services Directive is transposed into national law in each country.

The Payment Services Directive was finally passed through the EU Parliament and became effective in Nov 2007.  The directive was transposed into national legislation in most SEPA countries by Nov 2009, and subsequently to all remaining countries.  There are 23 optional provisions leave a certain margin of discretion to the Member States.   The Directive is in two parts.
The first part introduces the concept of a “payment institution” which would be a licensed institution offering payment services, but is not a bank.
The second part sets out certain pan-European rules, including maximum clearing times, user rights, information requirements, etc. in relation to payments.  “Framework contracts” will replace what we currently know as “terms and conditions”

Following is a brief summary of certain key elements:

Scope (Geographical):

Transactions which have at least one leg (Payer or payee) in a SEPA country

Scope (Currency):

Any currency

Execution time :

One day (from 2010 onwards)

Payment Institutions

Bnks are likely to challenge this on the basis it introduces a non-level playing field as regards criteria for participation

Liability:

Heavy liabilities on service provider.  Liability of user is limited to €150

Transaction authorization:

Rules on authorization and on cancelling of authorization

The PSD was transposed into Irish law as European Communities (Payment Services) Regulations 2009 (S.I. No. 383 of 2009) and became effective Nov 1 2009