The European Parliament has approved an accord on the Single Euro Payments Area (SEPA), which aims to speed up and lower the cost of bank transfers and direct debits across 32 European countries, including Malta.

MEPs voted by 635 to 17 (with 31 abstentions) to accept a deal that will force banks to bring in new payment systems.

The project, which started life in 2002 as a bank-led initiative, was stepped up in 2010 when the Commission set a deadline for the changeover to the new system which involves replacing national bank account numbers with international bank account numbers (IBAN) and bank identifier codes (BIC) to make bank transfers and direct debits in euros and removing the extra costs associated with making payments abroad.

The new regulation also wipes out multilateral exchange fees on international direct debits (between the 32 participating countries), saving businesses from having to set up separate bank accounts in every EU country.

The Commission estimates the new payments would save consumers, banks and companies up to €123 billion in six years and will come into force by 2014 in the 17 eurozone countries and by 2016 in the remaining 15 countries participating in SEPA.

Welcoming this development, Nationalist MEP Simon Busuttil – who acted as shadow rapporteur on this dossier – said that this is an important milestone towards the completion of the EU Single Market.

“The adoption of this report by the European Parliament will bring tangible benefits to citizens and businesses who will now be able to make payments across bank accounts in different member states just as easily as between accounts in their own country”, Dr Busuttil said.

“This will lead to increased consumer choice and lower prices as businesses costs decrease. Cheaper cross-border payment services also means that companies that previously did not find it profitable to offer their services to smaller member states, such as Malta, will now find easier to offer their services also to Malta.”