9 January 2014
European Commission to extend SEPA migration deadline
The word is out: the European Commission will grant businesses an extra period of six months to prepare for SEPA. The main reason for the extended deadline is that migration rates are too low, which means that is ‘highly unlikely’ that the target of 100% for SCT and SDD will be reached in a few weeks time (before February 1st 2014).
Payments that differ from the SEPA format will be accepted until August 1st, in order to minimise ‘any possible risk of disruption to payments for consumers and business’, according to the official statement by the EC.
Internal Market and Services Commissioner Michel Barnier said: “As of today, 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. Therefore, I am proposing an additional transition period of 6 months for those payment services users who are yet to migrate. In practice this means the deadline for migration remains February 1st 2014, but payments that differ from a SEPA format could continue to be accepted until August 1st 2014.”
“I regret having to do this but it is a measure of prudence to counter the possible risk of disruption to payments and potential consequences for individual consumers and SMEs in particular. There has been evidence in the past few months and I have warned many times that migration was happening too slowly and call once more on Member States to fully assume their responsibilities and accelerate and intensify efforts to migrate to SEPA so that all can enjoy its benefits, that is, faster and cheaper payments across Europe. The transition period will not be extended after August 1st.”
The announcement does not seem to come as a surprise. Financial media report on the news without a lot of buzz. According to the Frankfurter Allgemeine, the EC now calls on member states and the European Parliament to quickly agree. ‘There was no particular pressure from certain countries or businesses to extend the deadline’. In France, Les Echos stretches the inflexibility of the Bank of France, who ‘hammered in recent months that there would be no rescue plan for latecomers’.
- Regulation & Compliance