SEPA – A Way of Doing Electronic Payments

by | May 20, 2021


Written by David Grech

The Single Euro Payments Area or SEPA sets a platform where electronic payments in euro can be made or received, whether between or within national boundaries, under the same basic conditions, rights, and obligations. This requires the adoption of ISO XML standards in payments initiation between corporates, entities, and banking institutions, based on common business practices and a harmonised legal basis.

Currently, SEPA is made up of all the EU member states, together with a few EEA and non-EEA countries. Since 2002, the European Payments Council or EPC has been developing and promoting SEPA-compliant schemes and standards that are governed by several EU regulations and directives. SEPA was launched in 2008. Since then, the Maltese Government embarked on the initiative of implementing SEPA throughout its financial applications, focusing primarily on payments carried out by cheques, electronic credit transfers or electronic payments. SEPA became mandatory from February 2014, consequently being extended to August of the same year. As from February 2016, a significant change occurred whereupon the IBAN-only rule was mandated for the bank accounts used in the SEPA payment transactions.

From inception, the Central Bank of Malta (CBM) was selected by the Maltese public service as its payment service provider. MITA, together with CBM, has developed detailed technical IT guidelines, based on the SEPA Credit Transfer scheme and rulebooks, to enable Government Ministries and Departments to bring their IT systems, that generate electronic payments, SEPA-compliant. This also includes every new IT system which issues payments and is now being implemented in Government. Currently, there are 12 such systems which, amongst others, include Treasury Pensions, HR Payroll, the Corporate Financial Management System, and System for Administration of Social Benefits. Yearly, CBM processes two to three million SEPA payment transactions generated by these systems. The Treasury Department within the Ministry for Finance and Employment is the business owner of the SEPA initiative. On the other hand, MITA assists and supports the Ministries and Departments in keeping their IT systems SEPA-compliant according to the IT guidelines.

sepa countries

The introduction of SEPA brought several huge benefits for the Government, mainly, in heavily reducing the use of cheques for payments thus their associated costs. It also supports facilitation of the common electronic payments that are safeguarded by common rights and obligations, and makes transfer of money fast, simple, and more efficient. With rapid advances in technology and new levels of regulations emerging throughout Europe, SEPA prompted other EU initiatives associated with e-payments. One of these is the adoption of e-invoicing. SEPA is considered as an ideal launching pad for interoperable e-invoicing in Europe, integrating the two processes across the financial supply chain.

Together with the banking institutions and the Government, beneficiaries of SEPA payments can reap the benefits of a common euro currency and a single market for payment services that have been established within the boundaries of the EU. Not only placing payments is more convenient and efficient, but SEPA also provides a peace of mind and increased competition, while saving time and money for both citizens and stakeholders.


SEPA is considered as an ideal launching pad for interoperable e-invoicing in Europe, integrating the two processes across the financial supply chain.


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