Payment service providers (PSPs) have been assured that the UK will remain in the single euro payments area (SEPA) whatever the outcome of current wrangling over when and on what terms the country leaves the European Union (EU).

The European Payments Council (EPC) ruled that the UK can remain in the key euro payments system regardless of the outcome of Brexit, including failure to reach a agreed exit deal.

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

Financial services trade body UK Finance filed an application to the EPC last December for the UK to remain in the pan-European payments scheme. SEPA currently has 28 EU member states as participants, plus four members of the European Free Trade Association (EFTA) – Iceland, Liechtenstein, Norway and Switzerland – and also Andorra, Monaco, San Marino and Vatican City.

Relief at judgment

SEPA ensures the smooth flow of payments by establishing common rules, such as the sharing of fees between the sender and receiver. UK-based entities sending money to the EU feared higher costs if the UK was ejected from the scheme

UK Finance welcomed the approval of its application. Chief executive Stephen Jones said: “The decision ensures that in the event of a ‘no-deal’ Brexit, UK PSPs 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.”