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Core banking and payments technology

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  • What is a Core Banking System? 7 Key Features
  • What are Legacy Core Banking Systems? The Complex Nightmare
  • What are the key advantages of using a SaaS cloud-based banking system? Top 7 reasons why to avoid developing your own
  • Is using an open-source technology in core banking software development safe and secure? 
  • What are the advantages of using an open-source database in modern cloud-based whitelabel bank software? 
  • What advantages RESTful API has over SOAP API?
  • How does the use of GraphQL Federation enhances RESTful APIs?
  • Key principles and advantages of the microservices architecture in payment software solutions
  • What are the benefits of integrating container and orchestration technologies such as Docker and Kubernetes into the deployment of cloud-based software for bank systems?
  • What are the typical security measures undertaken by the cloud core banking systems developers to address the security concerns of financial institutions?
  • What is required of the SaaS cloud-based core banking software to enable the financial institutions to provide banking as a service or a superapps?
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Regulations and compliance

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  • What are the key concerns when choosing the core banking system from the perspective of regulatory compliance?
  • What is Open Banking, and why do banks, payment institutions and e-money institutions in the EU must publish Open Banking API?
  • What is strong customer authentication (SCA) regulatory technical standard (RTS)?
  • Can push notifications be considered compliant with SCA RTS?
  • Why is it important to use multi-factor authentication (MFA) when accessing a cloud-based core banking system?
  • Why is it essential to have comprehensive user management in the banking software?
  • Why is it important for the modern cloud-based core banking system to be built around a general ledger and have a chart of accounts?
  • Is it possible to obtain necessary information for regulatory reporting if an institution uses a core banking system with no general ledger and chart of accounts?
  • Why is there a need for customer risk scoring and transaction risk scoring?
  • Why is it ineffective or even dangerous to outsource the risk scoring from a third party without having it as a part of the cloud-based core banking software?
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Banking, payments, and e-money

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  • What is payment initiation service, and how it can be used?
  • What is a banking superapp and what does it offer?
  • What is banking-as-a-service, or BaaS?
  • What is an Account Servicing Payment Service Provider?
  • Who are Third-Party Providers (TPPs), and what is their role?
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  • What is Original Credit Transaction (Visa and Mastercard) and how is it used in payments?
  • What is SEPA, and what types of payment transactions it facilitates?
  • What is Step2 and what types of payment transactions it supports?
  • What is Target2, and what types of payment transactions it supports?
  • What is Faster Payments (UK), and what types of payment transactions it supports?
  • What is Bacs, and what kind of payments it supports?
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  • What is SWIFT, and what types of payments it supports?
  • What is a correspondent bank, and what is its role in payments?
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  • What is SEPA, and what types of payment transactions it facilitates?

What is SEPA, and what types of payment transactions it facilitates?

1 min read

what is Single Euro Payments Area (SEPA)

The Single Euro Payments Area (SEPA) has carved a pivotal niche in the realm of European electronic payments. By standardizing euro payments across a myriad of European countries, SEPA has led the charge towards a more coherent and efficient financial system. Covering an impressive span of 36 countries, including members of the European Union (EU) and the European Free Trade Association (EFTA), the SEPA vision embraces uniformity and ease of transactions within the SEPA region.

SEPA: An Array of Payment Transactions #

SEPA’s versatility is evident in the variety of payment transactions it facilitates:

  • SEPA Credit Transfer (SCT): SCT empowers individuals and businesses to dispatch electronic credit transfers in euros across the SEPA region. This bolsters speedy and efficient money movements between bank accounts, fostering a dynamic financial environment.
  • SEPA Direct Debit (SDD): SDD equips businesses to collect payments directly from customers’ bank accounts using a sanctioned direct debit mandate. Typically used for recurring payments such as utility bills, subscriptions, and loan repayments, SDD exemplifies the efficiency of the SEPA system.
  • SEPA Instant Credit Transfer (SCT Inst): Introduced in 2017, SCT Inst brings near-instantaneous credit transfers to the table. Ensuring real-time availability of funds, it facilitates immediate payments between participating banks, adding another feather to SEPA’s cap.
  • SEPA Card Clearing: This aspect of SEPA handles card-based payment transactions. Whether it’s card payments or ATM withdrawals executed with SEPA-compliant cards, this facet guarantees interoperability and consistent payment experiences across various SEPA countries.

The Mechanics of SEPA Transactions #

SEPA transactions leverage the International Bank Account Numbers (IBANs) and Bank Identifier Codes (BICs) to identify bank accounts and smoothen the path for cross-border payments within the SEPA territory. The standardized formats and protocols in place guarantee seamless interoperability among participating banks and payment service providers, reinforcing the unification ethos of SEPA.

SEPA: A Paradigm Shift for Euro Payments #

SEPA’s overarching aim is to uncomplicate and streamline euro payments, turning cross-border transactions into a process as simple and cost-effective as domestic payments. By promoting competition, efficiency, and transparency in the European payments market, SEPA furnishes a consistent framework for payment services across participating nations.

In summary, SEPA payments represent an unprecedented stride in the European financial landscape, fostering simplicity, efficiency, and coherence in euro payments. As a lynchpin of European financial integration, SEPA is indeed a force to be reckoned with. Baseella is made ready for you to start providing SEPA payments and has all of the integrations required for that.

Updated on July 25, 2023
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Table of Contents
  • SEPA: An Array of Payment Transactions
  • The Mechanics of SEPA Transactions
  • SEPA: A Paradigm Shift for Euro Payments
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