SPAA: Learn More About the Emerging SEPA Payment Scheme

Schemes define payment processing on an international level, so it’s essential to stay in sync with all the emerging updates. There are currently a few initiatives for new payment schemes, one of them being the SEPA Payment Account Access (SPAA). Find out everything you need to know about it in this detailed guide.

What Is a Payment Scheme?

Before delving into the nuances of SPAA, one must know what payment schemes are. Essentially, such schemes are sets of rules and technical standards that define how financial transactions are processed with the use of payment instruments.

Thus, all merchants dealing with payment systems like credit and debit cards, bank transfers, electronic wallets, and BNPL methods rely on payment schemes.

Payment Schemes Operating Principles

Any organization accessing a payment system, be it a payment service provider or a merchant, must comply with the procedures and regulations dictated by a scheme. These guidelines typically cover the following:

• The currency being used
• The timelines that PSPs should follow when conducting a transaction
• The data formats that the parties should utilize

Existing SEPA Payment Schemes

The Single European Payments Area (SEPA) consists of 34 countries - the 28 EU member states, Iceland, Liechtenstein, Monaco, Norway, and Switzerland. It was created to unify the standards and procedures for electronic and cash payments across the territories it covers.

The majority of direct debits and euro credit transfers in SEPA rely on the payment schemes developed by the European Payments Council (EPC).

The EPC has created four distinct schemes:

• SCT - SEPA Credit Transfer scheme - live since 28 January 2008.
• SCT Inst - SEPA Instant Credit Transfer scheme - live since November 2017.
• SDD Core - SEPA Direct Debit Core scheme - live since 2 November 2009.
• SDD B2B - SEPA Business-to-Business scheme - live since 2 November 2009.

The SCT and SDD Core schemes are mandatory to all payment service providers that facilitate transactions in Euro currency. However, the remaining two schemes remain optional.

Each of the EPC schemes consists of several elements, including:

1. A rulebook. This is a compilation of business standards, rules, and obligations required for the execution of SEPA payments.
2. Implementation Guidelines. The IGs are the technical translations of the rulebook mentioned above into ISO 20022 payment messages.
3. The SEPA Payment Scheme Management Rules. This file is common to all four schemes and lists the principles applicable to the scheme’s administration and further development.

The EPC also publishes case-specific clarification papers that elaborate the topics of the scheme’s implementation.

SPAA Payment Scheme

So, it’s all clear about the European Payment Council’s four SEPA payment schemes, but what is SPAA?

SEPA Payment Account Access (SPAA) is another emerging payment scheme from the EPC. Let’s take a look at its development and review its main targets.

SPAA Development Timeline

The SPAA payment scheme is still taking its first development steps. Here is a timeline of its evolution to date:

• 28 June 2021 - the Euro Retail Payments Board (ERPB) considered the report from the ERPB Working Group on a SEPA API Access Scheme and suggested that EPC becomes the scheme manager.
• 29 September 2021 - during a meeting, the EPC Board discussed establishing the SEPA Payment Account Access Multi-Stakeholder Group (SPAA MSG) to facilitate the preparatory phase of the SPAA scheme.
• 24 November 2021 - EPC stated that the acceptance of ERPB’s invitation would depend on the results of SPAA MSG’s preparatory work, giving the necessary clarity regarding the emerging scheme’s development scope in the foreseeable future.

Therefore, the SPAA MSG is currently responsible for the creation and development of the new payment scheme taking PSD2’s legal requirements as the “baseline”, yet going beyond it to add premium services in the context of open banking.

SPAA MSG’s Action Plan

SPAA MSG’s activities thus far include the following initiatives:

• 6 October 2021 - the virtual kick-off meeting that tasked the group to develop the scheme’s concrete scope, prioritized guidelines, and create its development plan to submit for EPC Board’s approval in November 2021.
• 27 October 2021 - SPAA MSG’s second meeting focused on the ongoing clarification of the future SPAA scheme’s detailed scope.
• 8 November and 19 November 2021 - meetings hosted to finalize the scheme’s preparatory phase.

After EPC Board’s preliminary invitation acceptance and the successful scheme’s first introduction session on 21 January 2022, the rough timeline of SPAA MSG’s actions appears this way:

• June 2022 - the draft of the SPAA scheme’s rulebook is scheduled to be subject to public consultation before Summer 2022.
• 30 November 2022 - at this time, the SPAA MSG is supposed to submit the SPAA scheme’s final draft of the rulebook for approval of the EPC Board.

If the Board accepts the first version of the new payment scheme, it will be published on their website and continue its further development.

What’s Coming Up Next?

The next step of the SPAA scheme’s development will be the creation of a dedicated Work Block that will operate under SPAA MSG’s authority. Its main objective would be creating "minimum API requirements" that will facilitate pan-European harmonization and interoperability. It will also ensure the scheme’s integrity.

The Work Block will consist of 10 experts elected by the Payment Account Access Multi-Stakeholder Group and representatives of European standardization initiatives in the field of PSD2 API.

The organization will be chaired A. González Mac Dowell, SPAA MSG’s co-chair. He states that it is highly anticipated that the emerging scheme will boost Europe’s movement toward an “open data society”.

According to him, if implemented correctly, this initiative has the potential to facilitate plenty of innovation opportunities that will bring new client experiences alongside fresh revenue streams for market actors.