SEPA

SEPA (Single Euro Payments Area) consists of 34 states (all member states of the European Union, Norway, Iceland, Lichtenstein, Switzerland, the Principality of Monaco, and San Marino) where credit transfers in euros are made according to the same payment schemes and applying uniform conditions, rights and obligations. SEPA credit transfers can be made only among the states belonging to the SEPA area.

The SEPA Regulation provides that the established requirements and common SEPA payment schemes should be applied gradually. With Lithuania having joined the euro area at the beginning of 2015, SEPA requirements shall come into force not later than on 1 January 2016. In other non-euro area states, SEPA requirements shall be implemented not later than before 31 October 2016.

SEPA Credit Transfers

Credit transfers are one of the most popular means of non-cash payment in Lithuania. They make up approximately a half of all non-cash payment operations. Domestic credit transfers amount to 99 per cent of all credit transfers, and three in four credit transfers are made with the payer and the beneficiary having accounts at the same bank.

SEPA credit transfers (referred to as the “Domestic/EUR Payment” in the internet banking) are credit transfers in euros carried out in Lithuania and other European states that belong to the SEPA area. No difference remains if the beneficiary is in Lithuania or in another European state, payments in euros are made uniformly.

SEPA credit transfers
Payer/originator/beneficiary/beneficiary party’s name – 70 symbols allowed.
Details of payment – 140 symbols allowed. Details of payment may be in the form of free text or structured. In the structured details of payment, the payer may provide the number indicated in the beneficiary’s invoice allowing to recognise the service or invoice being paid. E.g., the ISO 11649 standard is commonly used.
Various identifiers can be used to identify the payer/originator/beneficiary/beneficiary party: VAT number, social security number, etc., including codes provided by the sender/beneficiary. Only one identifier can be provided.
Reference number must be indicated in the field of structured details of payment*, 35 symbols allowed.
End-to-end reference is transferred to the beneficiary unchanged if the payer provided it. If the field is not filled in, the payment service provider of the payer transfers the “NOTPROVIDED” value to the payment service provider of the beneficiary. The reference is used to identify the target of payment, e.g., if the invoice is paid in three remittances, then the reference number of all three remittances must be the same.
Purpose indicating to the beneficiary the payer’s main reason for payment or the details of payment: e.g., vehicle insurance contribution, payment for telephone/TV services, payment for transportation services, payment for gas, etc. The final list of purpose values is provided in the ISO standard.

* If the beneficiary needs to get the details of payment and reference number in one SEPA credit transfer, the beneficiary can make an arrangement with payers regarding the structured information content provision in the free text details of payment field, but the payer’s/beneficiary’s payment service provider will not check it.

E-invoice

Electronic invoice (hereinafter referred to as the “e-invoice”) is an electronic invoice created, submitted, registered and stored in the electronic environment. Customers will receive and will be able to administer e-invoices for the received services or purchased goods safely and conveniently in the internet banking.

Submission and payment of e-invoices as of 01/01/2016
Payer has an account with the bank.
Payer submits the application to receive e-invoices via the internet bank, at the bank’s branch offices or at the beneficiary’s company.
Beneficiary submits e-invoices to the payer’s bank and all payer’s invoices are stored in the internet bank.
Payer orders the bank to make automatic payments according to e-invoices. Payer makes payments according to e-invoices.
Funds are debited from the payer’s account – the invoice for services is paid.

Benefits of e-invoicing for the payer:

  • all e-invoices are stored in the internet bank;
  • payment of e-invoices using the selected method;
  • possibility to choose the amount limit and/or date for each beneficiary;
  • ordering of e-invoicing at the beneficiary’s company, via the internet bank or at the bank;
  • automatic payment of e-invoices for customers who do not have the internet banking;
  • additional information about submitted e-invoices.

The customer will be able to order the new e-invoicing service from the service provider, at a bank’s customer service division or via the bank’s internet banking. The customer will choose the way to pay the invoice:

  • by automatic payment – it is possible to set e-invoicing payment conditions, for example, the monthly amount limit or partial payment of e-invoices; also the payer will be able to review the date and amount of the future payment in advance and if there are any discrepancies in the e-invoice, cancel the respective payment without the termination of the automatic payment agreement;
  • by usual transfer – the payer will be able to pay the e-invoice by a one-off credit transfer. It will not be required to fill in the payment order data since it will be transferred to the payment order form automatically.

Payers who do not use the internet banking also will be able to choose e-invoicing with the automatic payment.

For more information about e-invoice, please read here.

FAQ
Q
What changes will be implemented upon transferring to the SEPA project?
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A

SEPA eliminates differences between domestic and international payment order forms. For example, when performing operations within the territory of the country as usual, as of 1 February 2016, the citizens will not have to indicate BICs of payment service providers when performing international operations. Issuers of payments will not have the right to indicate to beneficiaries, in which member state the latter must have settlement accounts. However, some differences may remain; for example, when making payments within the country, Lithuanian characters will be allowed. If the payer’s or beneficiary’s account is not in Lithuania, only Latin characters will be allowed for transfer.

The SEPA credit transfer scheme is similar to the credit transfer service provided in Lithuania, and instead of the current direct debit service, Lithuanian payment service providers will offer the alternative electronic invoicing to the population.

Q
Who is implementing the SEPA project?
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A
The main SEPA requirements and terms of implementation were established by the European Parliament and the Council with Regulation No 260/2012 of 14 March 2012. The European Payments Council representing banks in the SEPA project has prepared SEPA payment schemes and they are implemented by the payment service providers and companies.
Q
Who coordinates the implementation of the SEPA project in Lithuania?
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A
The Lithuanian SEPA Coordination Committee consisting of the payment service providers was created for the implementation of this project. The Committee makes decisions with regard to issues relating to the provision of information to society and technical transfer to SEPA and has prepared the plan for the change of country means of payment with SEPA means of payment, which is updated periodically. However, the SEPA Regulation provides that every payment service provider and every company is responsible for the implementation of SEPA requirements severally.
Q
Is it possible to initiate the SEPA credit transfer to the country not belonging to SEPA?
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A
SEPA credit transfers can be made only among the states belonging to SEPA.
Q
Will the level of domestic transfer services be impaired because of SEPA?
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A
According to the Law on Payments of the Republic of Lithuania, domestic credit transfers submitted before 12 o’clock must reach the beneficiary’s account on the same day. SEPA will not change this provision. It is anticipated that the competition will encourage the speed-up of international payments as well. Pursuant to the Law on Payments of the Republic of Lithuania, such payments must be completed within one business day (within two business days if the payment is initiated using the paper-based procedure).
Q
What is the SEPA reachability requirement?
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A
The reachability requirement is applicable to payment service providers and obligates them to ensure that the account opened for the payment service user, if it is used for payment operations in euros within the domestic market, must be adjusted for sending and receiving the respective SEPA payments. In other words, user accounts must be adjusted for SEPA credit transfer and SEPA direct debit operations, unless the payment service provider does not provide such services of funds transfer in euros.
Q
What are SEPA credit transfers and how they differ from current credit transfers in Lithuania?
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A
The European Payments Council has prepared the SEPA transfer scheme corresponding to the requirements of the SEPA Regulation, Currently, this is the only credit transfer scheme in the SEPA area. The properties of SEPA credit transfers are similar to the credit transfers in the national currency carried out in Lithuania. However, some data fields and/or the length of data differ. Discrepancies between formats at the end on 2015 when two options (SEPA formats and usual national formats) will be used on the market may cause inconveniences. In order to reduce the risk of losing a part of information, it is suggested to follow the recommendations of payment service providers.
Q
Will SEPA means of payment allow using Lithuanian characters?
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A
Yes. As of 2016, the possibility to use the Lithuanian alphabet when making credit transfers between the accounts of payment service providers registered in Lithuania will be preserved. However, beneficiaries having accounts outside of Lithuania will only receive Latin characters.
Q
How to recognise settlement accounts corresponding to the SEPA requirements?
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A

All settlement accounts used by SEPA must be provided in the IBAN format. One of the visible IBAN characteristics are two letters indicating the country code. For example, accounts used in Lithuania start with LT. IBAN structure in Lithuania looks as follows: LTKK BBBBB SSSSSSSSSSS, where LT is the country code, KK is the special control code, BBBBB is the bank code, and SSSSSSSSSSS is the account number. The example of IBAN in Lithuania: LT12 1000 0111 0100 1000.

IBAN may be different in separate states. The detailed information about the IBAN structure in various states in the English language is provided here.

Q
Will citizens really not be required to provide BICs when initiating international payment orders?
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A
The SEPA Regulation (No 260/2012) does not grant the right to payment service providers to require indicating BICs after 1 February 2016. Up to this date, payment service providers may require indicating the BIC when performing international operations but only in cases when it is necessary. However, the requirement to indicate BICs may be further applicable to SEPA transfers to Switzerland, the Principality of Monaco and San Marino because these states are outside of the European Economic Area and the provisions of the SEPA Regulation are not applicable there.
Q
Are SEPA credit transfers already performed in Lithuania?
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A
Payment service providers offering the credit transfer service in Lithuania will be obligated to offer SEPA credit transfers as of 1 January 2016. However, even now the most banks operating in Lithuania and the divisions of foreign banks provide the SEPA credit transfer service.
Q
Will credit transfers become more expensive because of SEPA?
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A
SEPA increases the competition in the field of payment services. It is expected that due to this, changes favourable to the population will take place longer-term.

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