It has been clear for more than a decade that the EU authorities expect national legacy euro credit transfer and direct debit schemes to be replaced by harmonised SEPA Schemes, with a view to promoting the further integration of the internal market and completing the monetary union.
Consequently, market participants in the euro area need to ensure compliance with the 1 February 2014 deadline for migration to harmonised SEPA payment schemes established with the SEPA Regulation. This legislative act affects not only payment service providers (PSPs), but also payment service users (PSUs) such as corporates, small and medium-sized enterprises, public administrations and government agencies. Implementation of the SEPA Schemes and technical standards has its challenges, however these are comparable to the challenges inherent to the implementation of other major change programmes. The market - on both the demand and supply sides - has ample experience in managing such projects.
Early movers on the demand side confirm that migration to the SEPA Schemes and technical standards generates tangible benefits. According to the SEPA Indicators compiled by the European Central Bank, close to 30 percent of all credit transfers generated by bank customers in the euro area in August 2012 were SCTs.
The supply side of the euro area payments market rolled out SCT and SDD services early, not only as a result of political expectations, but as mandated with previous EU regulatory action. Since 1 November 2010, all payment service providers in the euro area reachable for national direct debits must be reachable for cross-border direct debits; e.g. the SDD Core Scheme, as mandated by Regulation (EC) No 924/2009 (Article 8). SEPA is kicking in and it is working.
Early movers on the demand side who reported on their SEPA migration experience in the EPC Newsletter confirm that implementation of the harmonised SEPA payment schemes and technical standards is beneficial, but requires careful planning. PSUs have to implement significant changes to their operational models. They have to invest in system upgrades, testing and staff training. The scope of the changes is extensive. On 29 February 2012, the EPC launched a five-part blog series which highlights the lessons learnt by PSUs handling major payment volumes who have already successfully concluded migration to SCT and SDD. In February 2012, these SEPA pioneers - who started migration planning as early as 2007 or 2008 - unanimously recommended that organisations, which have yet to adapt systems and operations to the SEPA payment instruments, become active immediately. Now in October 2012, this is no longer a recommendation but an imperative: any organisation which has not yet initiated the migration process must act now; there is no time to procrastinate further.
Organisations now working towards achieving compliance with the SEPA Regulation by 1 February 2014 in the euro area are invited to take advantage of the numerous resources offered by the banking industry and other service providers to support market participants during the transition. Relevant information is also made available with the ‘EPC Migration Tool Kit'.
Full information
The EPC-Migration Tool Kit
© EPC
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