The single payments area in Europe

Recent legislative developments in the field of payment services in the European Union aim at building a uniform European payments market. The creation of an internal market for payments has been the result of both industry self-regulation and public regulation. The Payment Services Directive (PSD) and Regulation 924/2009 support and complement the private regulatory regime developed by the banking sector's European Payments Council, the Single Euro Payments Area (SEPA). The PSD provides a legal framework for SEPA by harmonizing certain core payments provisions, while Regulation 924/2009 substantially enabled the launch of SEPA Direct Debit by laying down the principle of “reachability” for cross-border direct debit payments and by regulating multilateral interchange fees in direct debit transactions. This Note describes in further detail the PSD, Regulation 924/2009, and their relation to SEPA.