Originally posted on 10 Jan 2014
This week, the European Commission adopted a proposal to give an extra transition period of six months during which payments which differ from the SEPA format can still be accepted so as to minimise any possible risk of disruption to payments for consumers and businesses. But the proposal doesn’t change the formal deadline for migration of 1 February 2014.
Internal Market and Services Commissioner Michel Barnier said:
“An efficient Single Market needs an efficient SEPA. The entire payments chain – consumers, banks, and businesses – will benefit from SEPA and its cheaper and faster payments. Cross-border payments are no longer exceptional events which is why an efficient cross-border regime is needed.
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 1 February 2014 but payments that differ from a SEPA format could continue to be accepted until 1 August 2014.”
The Europa press release on this is here.
The Irish Times ran a story on this, with no punches pulled here. They say: “The introduction of a new intra-bank payments system which is supposed to speed up financial transactions across the European Union has been delayed as a result of “lazy banks… dragging their heels,” a leading business group has claimed.”
The Single Euro Payments Area (SEPA) was due to come into being across the eurozone countries on 1 February 2014 – standardising the cost and complexity of cross border transactions. The purpose of the change is to make the banks in the 28 EU member states, as well as Norway, Liechtenstein, Iceland, Switzerland and Monaco, speak the same financial language to allow for faster cross-border credit transfers and debit payments.
It was due to be rolled out across the eurozone first with the other countries following suit by the end of 2016. While it will still formally come into being in euro countries next month, payments made in alternative formats will also be accepted by banks across the EU until the beginning of August.