The European Commission and the European Central Bank (ECB) expressed in Brussels on Thursday support for the European Payments Council (EPC) to launch the Single Euro Payments Area (SEPA) Direct Debit scheme.

Under the scheme, bank customers would be able to arrange direct debits to pay companies with bank accounts in any of the 31 European countries participating in SEPA.

The Commission and ECB have recognized the potential advantages of the SEPA Direct Debit scheme, in terms of economies of scale and increased competition liable to drive efficiency and innovation in the area of payments to the benefit of European consumers and companies.

"The SEPA Direct Debit scheme is one of the key elements in establishing a single euro payment area. It offers enormous potential for individuals and businesses to manage cross frontier payments on the basis of a single bank account," said Internal Market Commissioner Charlie McCreevy.

"Most national direct debit schemes are free and I would expect that the introduction of SEPA Direct Debits would not involve any increase in fees for customers," he added.

He said that he would call on the industry to come forward with their detailed proposals "so that the necessary decisions can be taken to launch this important project."

Competition Commissioner Neelie Kroes noted that it "may prove necessary to have a multilateral interchange fee for cross border SEPA Direct Debits in the very initial stage".

"But we will have to be convinced that these fees will be strictly limited in time and objectively justified, i.e. are not aimed at providing additional profits to banks," the commissioner promised.

ECB Executive Board Member Gertrude Tumpel-Gugerell said, "It would not be acceptable that bankers are not able to deliver the SEPA Direct Debits by November 2009."

He said that a European solution "has to be found by the banks which are also agreeable to the competition authorities. But SEPA Direct Debits have to be rolled out in a little more than one year from now."

Direct debit schemes allow bank customers to give companies or organizations authorization to take money directly from their bank accounts to pay their bills, e.g. gas, electricity, telephone.

Currently there are separate national direct debit schemes and it is not possible to establish direct debit arrangements across frontiers in Europe.