Running a French Holiday Gite in Rural Brittany

Saturday, May 05, 2007

Cheaper overseas bank charges promised by SEPA

SEPA is coming!

Since 2000 the European Central Bank has been working towards SEPA (The 'Single Euro Payments Area') which we're promised will be delivered early in 2008.

If you've ever tried using your credit or debit card abroad then you'll realise that most banks treat this as a licence to print money and charge you outrageous fees for the audacity of using your card abroad. Fees vary (and have increased in recent years) with most providers adding around 2.75% to the purchase price and converting the currency at a less than favourable rate.

That's of course if you can get your UK card to work at all overseas. If anything chip and pin has made things worse when you take your card abroad as the UK has been first to implement the new European standard you can often find that your card not accepted outside of the major towns and cities. We've had this problem ourselves with our UK cards not being accepted at French 24 hour petrol stations, and although the situation is improving and we still see other UK drivers sometimes struggling to get their cards to work.

Anyway, SEPA promises to change all that with "a single set of euro payment instruments" and "efficient processing infrastructures for euro payments".

Even though we don't use the Euro in the UK, SEPA should usher in a new era of more streamlined, simpler and more efficient debit and credit card payments, both whilst travelling abroad and for European visitors to the UK. As well as finding your cards more widely accepted the big advantages should be increased acceptance of overseas cards in the Euro zone (and vice versa) and reduced card handling fees.

SEPA isn't going to happen over night but the end goal is that you should be able to trade overseas as easily as you can trade in your home country with flexibility to make payments, receive cheques and setup direct debits with our European colleagues as easily as we can in the UK.

For Gite owners like myself it may in the long run mean that I no longer need to keep a French bank account to pay my utility bills and council taxes from, and I can manage everything from a single domestic bank account.

The first phase of SEPA comes in January 2008 and it's progressively being implemented through to 2010.

For more details there's lots on Google, but three I picked out are a SEPA overview on, the European Central Bank's SEPA homepage which describes progress towards the vision and "All you need to know about SEPA" from Albany software.

In the meantime a cost effective option is to have a Nationwide Building Society credit or debit card, they promise not to charge any handling fee for any of their cards if you use it abroad - further details of their Overseas card promise on the Nationwide BS website.

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