December 22, 2011 – The European Parliament and Council have finally reached agreement on a deadline of February 2014 for the migration to Sepa credit transfers and direct debits. The EC has long accepted the need to enforce migration deadlines from national credit transfers and direct debits to Sepa (Single Euro Payments Area) instruments, conceding self-regulation has failed to bring the move about quickly enough. Last December the Commission set out its proposals for EU-wide end-dates, suggesting that once the regulation comes into force, national credit transfers be replaced by the pan European Sepa SCT within 12 months, with direct debits following after another year.

However, following pressure from, among others, the Parliament and the European Central Bank, the idea of separate deadlines has been ditched. Instead, a legally binding February 2014 date has been agreed by the EC and MEPs, and now awaits the rubber stamp of full Parliament and Council approval.

The Sepa deal to ensure EU-wide rules making payment service providers compete fairly, eliminate hidden national bank charges, and accelerate transfers, could save up to EUR123 billion within six years, claim MEPs, benefiting clients, banks, and businesses.

Sari Essayah, MEP, says: “The Sepa is a fundamental element of the internal market. The internal market cannot function well without Sepa. Moreover Sepa will provide the basis for other developments in the single market.”

European Commissioner Michel Barnier adds: “By agreeing with the Commission proposal to fix a deadline for the migration to pan-European payment instruments just over a year after it was proposed, the European Parliament and the Council have risen to the ambitious challenge to increase the efficiency of our payment systems so that high-quality and competitively priced electronic payment products exist throughout the whole of the EU.”

However, despite 2014 representing a significant delay to the initial targets for migration, it could still prove ambitious. At the Sibos banking conference in September, a straw poll of delegates conducted during a panel session found the naysayers on the floor held a slim majority over the optimists when asked whether 2014 could be met.

Vendor Experian was quick to welcome the decision, and also tout for business, with Jonathan Williams, director of payments strategy, warning: “Early adoption is crucial. If left to the last minute, the Sepa requirements have the potential to be both disruptive and costly. Banks and their corporate customers need to provide a smooth transitional process to Sepa in order to avoid costly errors and keep customers happy.”

The table below provides an overview of the most important dates for SEPA migration fixed by the Regulation:

Related links:

• European Commission Press Release of 20 December 2011: ‘Commissioner Michel Barnier Welcomes Agreement by Council and Parliament Establishing SEPA Migration End-Dates’
• European Parliament Press Release of 20 December 2011: ‘Cheaper, Faster and Safer Cross-border Payment Services’