SEPA payment instruments

SEPA credit transfers are cashless transfers in euro initiated by the payer and performed in accordance with the scheme established by the European Payments Council (EPC) in the whole SEPA area. There is no limit on the value of the payment, and the whole amount of the payment reaches the beneficiary in 1 business day. IBAN and bank identification code (BIC) are used as account identifiers. All bank accounts used in Lithuania are already numbered according to the IBAN format.

SEPA credit transfers have been available in Lithuania, as in the whole SEPA area, since 28 January 2008. Thirteen banks and foreign bank branches operating in Lithuania that cover around 98 per cent of the retail payment market have the right to perform these transfers. Although all these banks can accept SEPA credit transfers and credit the funds into the beneficiary’s account, not all banks currently offer the possibility to initiate SEPA credit transfers. Please inquire your bank regarding the possibility to initiate SEPA credit transfers. Information on SEPA payment instruments offered by banks is also available on the website of the Bank of Lithuania.

SEPA direct debit transfers are cashless payment transfers in euro initiated by the beneficiary covering recurrent and one-off payments in the whole SEPA area. Maximum settlement time is five business days for the first payment and two business days for the next ones. IBAN and BIC are used as account identifiers. The EPC adopted two SEPA direct debit schemes: SEPA Core Direct Debit Scheme and SEPA Business-to-Business Direct Debit Scheme. SEPA core direct debit scheme has substantial differences, compared to the currently provided funds debiting services: a more important role has been granted to beneficiaries (for example, when accepting and storing permissions) and the protection of payers’ funds has been ensured (for example, the possibility to redeem the funds within eight weeks after the debiting of funds).

The service of direct debit in euro was not in demand in Lithuania up to now and was not provided. Therefore, most of the Lithuanian banks are inclined to start providing SEPA direct debit services, when Lithuania changes the national currency to the euro. Still, one bank is already providing SEPA core direct debit scheme services to the payers.

SEPA card payments SEPA card payments are such card payments, where the entities participating in the issue of cards, processing of operations and other processes follow the principles established in the SEPA Cards Framework adopted by the EPC. Card holders will have to use the PIN code always: both when performing operations at ATMs, and when settling for goods and services. In addition, they will be able to settle in the whole SEPA area using a single card. These changes should be implemented by the end of 2010.

All new payment cards issued by banks in Lithuania are smart cards that comply with the EMV standard. Still, in order to comply with all principles established by the EPC, the changes of card servicing infrastructure (card readers, ATMs) are required. Due to new technological solutions, it will be necessary to update the software and replace the hardware in trade centres, where card readers that do not yet process smart payment cards of the EMV standard and integrated cash desk systems are installed. It will also be necessary to upgrade the hardware in automatic gas stations. It is planned to implement these changes by the end of 2010.

* EMV is the standard dedicated to ensure compatibility between smart cards, readers and ATMs when initiating payments by credit and debit cards.