Brendan Howlin (Wexford, Labour)
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Question 66: To ask the Tánaiste and Minister for Finance the status, in terms of legislation, implementation and monitoring, of preparations for the single European payments area; and if he will make a statement on the matter. [7740/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Payments systems deal with the transfer of money (funds) between bank accounts. While each Member State has effective payments systems at national level, the integration of the single market in financial services has been hindered by the lack of cross-border interoperability between national payments systems. For some years now the payments industry has been working to improve the dynamics of cross-border business activity by developing a pan-European electronic payments system for payments in euro. It is called SEPA (the single euro payments area). The project is being delivered by the banking industry via the European Payments Council (EPC).

SEPA will be an area where consumers, companies etc can make and receive electronic payments in euro in Europe — whether between or within national boundaries, under the same basic conditions regardless of location. The key components of SEPA are the new payments systems for

Credit transfers, that is, making payments electronically from or into bank accounts, including the use of internet or telephone banking. For example, they include making salary or pension payments into bank accounts.

Debit systems and

The SEPA Cards Framework.

I should mention that SEPA will not provide clearing for paper-based payments such as cheques.

The SEPA Credit Transfers System, the first of the new SEPA payment instruments, was formally launched on 28 January 2008. The SEPA Direct Debit Scheme will be launched in late 2009, after all Member States have transposed the Payments Services Directive which is needed to give it legal underpinning. Cards compliant with the SEPA Cards Framework will be available at a later date.

While the main focus of SEPA is on euro area Member States, SEPA will also apply to euro payments to and from Member States outside the euro area.

As I have already mentioned, the Payment Services Directive (PSD) is needed to provide legal underpinning for the SEPA project, especially the debit card element. The deadline for transposition is 1 November 2009. Work to transpose the PSD is already underway in my Department and consultations with relevant stakeholders have been initiated.