Thursday 7 March 2019 4:04 pm

UK to remain part of key euro payments system even in a no-deal Brexit

Reporter at City A.M. covering banking, markets and insurance

Reporter at City A.M. covering banking, markets and insurance

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The UK will remain part of a key euro payments system even in the event of a no-deal Brexit.

The European Payments Council (EPC) has ruled that the UK can remain in the bloc’s Single Euro Payments Area (SEPA) regardless of the outcome of Brexit.

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It means UK consumers and businesses will be able to make and receive payments in euros and hold bank accounts in the currency beyond 29 March.

The pan-European SEPA schemes ensure the smooth flow of payments by establishing common rules, such as the sharing of fees between the sender and receiver.

The UK's exclusion could have made euro payments from the UK less efficient and more costly for customers.

UK-based entities sending money to the EU had feared increasing costs if the UK was excluded from SEPA.

But UK Finance’s application for the country to remain in SEPA has today been approved.

Chief executive Stephen Jones said: "Today’s decision ensures that in the event of a ‘no-deal’ Brexit, UK payment service providers will still be able to make and receive payments from other European countries that are part of SEPA.

“This is a positive outcome for the consumers and businesses on both sides of the Channel who rely on the SEPA schemes to make billions of euros worth of payments each year."

The financial services trade body said the UK’s inclusion in the payments area enabled consumers to pay in euros when travelling, shopping online or transferring money to someone living in another European country.

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It also said the schemes were crucial for British citizens working, studying or living abroad as it enabled a euro account in the UK to receive a salary earned in Spain or to pay a utility bill in France.

UK Finance made the application in December and the EPC made the decision following a board meeting this afternoon.

The SEPA currently includes the 28 EU member states plus Iceland, Liechtenstein, Norway, Switzerland, Andorra, Monaco, San Marino and Vatican City.