Single Euro Payments Area (SEPA) in Lithuania

On 1 January 2016, Lithuania joined the Single Euro Payments Area (SEPA), which consists of 36 countries. Under SEPA, payments in euros are executed under harmonized terms. SEPA establishes a single set of tools and standards that make cross-border payments in euro as easy as national payments.

SEPA Regulation

Main requirements for credit transfers and direct debit operations that are executed in the SEPA area are defined in the SEPA Regulation. Its provisions apply to payment services in euro when the payer’s payment service provider and the payee’s payment service provider are both located within the European Economic Area (EEA). In some cases, payment service providers are also able to provide payment services in line with SEPA requirements in some other territories where the SEPA Regulation does not apply.

Institutions that are responsible for ensuring compliance with the SEPA Regulation should be appointed in every Member State. In Lithuania, the authority is the Bank of Lithuania. In order to execute payments under equal terms, payment schemes must be applied which are designed by market participants.

The following schemes are currently in operation:

- SEPA Credit Transfer Scheme, which is typically used for one-time transactions and exercises the IBAN (International Bank Account Number).
- SEPA Core Direct Debit Scheme, which allows the creditor to collect funds from the debtor’s account provided that the debtor has authorized the payment.
- SEPA Business-to-Business Direct Debit Scheme, which allows business customers in the role of debtors (payers) to make payments by direct debit as part of their business transactions.
- SEPA Instant Credit Transfer Scheme, which is designed for executing instant payments in Europe.

All schemes are managed by the European Payments Council, which is an organization uniting payment service providers in Europe.

In the next part we will cover the implementation of SEPA specifically in Lithuania.

To find out more about the function of SEPA in Lithuania, please refer to our Baltic lawyers at info@gencs.eu