Sluggish Transition Leads to SEPA Deadline Extension (Jan. 9, 2014)
The European Commission today has announced a six-month grace period from the Feb. 1 migration deadline for electronic payments that don’t meet Single Euro Payments Area (SEPA) requirements. The commission proposed to amend the SEPA regulation because the transition has been slower than anticipated, thus raising risk of disruption for businesses and consumers.
“Migration rates for credit transfers and direct debits are not high enough to ensure a smooth transition to SEPA, despite the important work already carried out by all involved,” said Michel Barnier, internal market and services commissioner. “Therefore, I am proposing an additional transition period of six months for those payment services users who are yet to migrate. In practice this means the deadline for migration remains [Feb. 1], but payments that differ from a SEPA format could continue to be accepted until [Aug. 1].”
SEPA is intended to make cross-border euro payments—whether by credit transfer, direct debit or credit/debit card—as quick, safe and easy as domestic payments through common payment protocols and systems. Officials monitoring the progress said migration rates have been growing over the last few months to reach 64.1 percent for SEPA credit transfers and 26 percent for SEPA direct debits, but that it would be “highly unlikely” to reach 100 percent compliance by February. Last October, the European Central Bank warned stakeholders that the next three months would be critical for those still needing to migrate to the SEPA standard.
In related news, the European Payments Council (EPC), which represents the European banking industry in relation to payments, and the Cards Stakeholders Group (CSG), which represents retailers, vendors, processors, card schemes and the EPC, this week have published the latest version of the SEPA Cards Standardization Volume. The document outlines standards for card-present transactions designed to ensure an interoperable and scalable card and terminal infrastructure across SEPA.
