European Parliament Backs EC Proposal to Extend SEPA Deadline to Aug. 1 (Feb. 4, 2014)
The European Parliament this morning approved the European Commission’s proposal to extend the deadline for payments to comply with SEPA regulations to Aug. 1, 2014. The original deadline was Feb. 1, 2014, but the EC last month proposed the extension because it said the transition has been slower than anticipated, thus raising risk of disruption for businesses and consumers.
SEPA is an initiative of the European banking industry that will make all electronic payments across the euro area—e.g., by credit card, debit card, bank transfer or direct debit—as easy as domestic payments, according to the EC.
“The objective is to ensure payments are not blocked in cases where stakeholders are not ready, and thus minimize any possible risk of disruption to payments for consumers and businesses, in particular SMEs,” said Commissioner Michael Barnier. “Payment service users can thus be certain that their payments will continue to be processed, and those who have not yet migrated have the time to do so. The proposal will apply with retroactive effect,” he added. Barnier also said the transition period will not be extended after Aug 1.
Formal adoption in the council will take place in the coming days.
The European Central Bank had issued a statement following the EC’s original proposal last month, countering the idea of extending the deadline. “Strong and successful migration efforts have been carried out by stakeholders in the euro area,” the ECB noted. “The most recent information from national SEPA communities suggests that the pace of migration is high and accelerating, and the vast majority of stakeholders will complete their migration on time [to meet the original deadline].”
According to recent figures provided by national central banks, 74 percent of credit transfers in the euro area were already SEPA-compliant at the end of December (from 64 percent in November). For direct debits, the figure was 41 percent, up from the 26 percent in November.