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09 January 2014

SEPA: Commission introduces an additional transition period of six months

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During the six months, payments which differ from the SEPA format can still be accepted in order to minimise any possible risk of disruption to payments for consumers and businesses. The proposal does not change the formal deadline for migration of 1 February, 2014. (Includes Eurosystem and EPC statements.)

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.

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 1 August."

The SEPA Regulation (EC 260/2012) adopted in 2012, aims to create the reality of a European Single Market for retail payments. The SEPA Regulation marks 1 February 2014 as the point at which all credit transfers and direct debits in euro should be made under the same format: SEPA Credit Transfers (SCT) and SEPA Direct Debits (SDD).

If no action were to be taken by the Commission and the co-legislators, banks and payment services providers would be required to stop processing payments that differ from the SEPA format as of 1 February 2014. This could result in serious difficulties for market participants that are not yet ready, particularly SMEs, who could have their payments (incoming or outgoing) blocked.

That is why the Commission is making a proposal today to amend the SEPA Regulation and minimise the risk of possible disruption. The introduction of a transitional period of six months, until 1 August 2014, means that the SEPA end-date remains the same but banks and payment institutions will be able to agree with their clients to process payments that differ from the SEPA standard until then. After 1 August 2014, there will be no further transitional period.

Taking into account the urgency of the situation, the Commission urges the co-legislators to rapidly take up and agree this proposal so as to ensure legal clarity for all stakeholders. The Commission also calls upon Member States to ensure that, should the proposal still be in process of adoption on 1 February 2014, banks and payment services providers will not be penalised for continuing to process legacy payments in parallel with SEPA payments. For this reason, the proposal, if adopted after 1 February 2014 by the Council and Parliament will have a retroactive effect as from 31 January 2014.

Full press release

Text of the proposal

Statement of the Eurosystem on SEPA Migration End Date

The Eurosystem takes note of the European Commission’s proposal to modify EU Regulation No. 260/2102 related to the Single Euro Payments Area (SEPA), introducing an additional transition period of six months.

Strong and successful migration efforts have been carried out by stakeholders in the euro area. 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.

The Eurosystem therefore stresses that the SEPA migration end date of 1 February 2014 remains and urges all market participants to complete the transition of all credit transfer and direct debit transactions to the SEPA standards by this date.

Press release


In order for the additional transition period to become effective, this proposal introduced by the European Commission must be formally adopted by the EU co-legislators. This means: the European Parliament and the Council of the EU must take the necessary steps to modify the legal text of Regulation (EU) No 260/2012 currently in effect.

The EPC recommends that all market participants in the euro area continue working towards meeting the 1 February 2014 deadline since the modification of the Regulation (EU) No 260/2012 has not yet been confirmed by the European Parliament and the Council of the EU. This is in line with the recommendation of the Eurosystem, which comprises the European Central Bank and the national central banks of the EU Member States whose currency is the euro.

The European Commission indicated that its proposal to modify Regulation (EU) No 260/2012 could still be “in process of adoption” by the European Parliament and the Council of the EU on 1 February 2014. This would mean that payment service providers and users in the euro area would not have certainty by 1 February 2014 whether the “extra transition period” proposed by the European Commission applies or not.

The EPC emphasises that in the event that the EU legislator would change the Regulation (EU) No 260/2012 in line with the proposal introduced by the European Commission on 9 January 2014, it will be crucial that relevant public authorities ensure that all stakeholders impacted across the euro area are informed on the effectively modified deadline for compliance with this EU law immediately.

It is the responsibility of the public authorities determining the SEPA compliance requirements to avoid a situation where uncertainty around applicable legal deadlines would impact ongoing migration efforts and further delay the completion of migration.

Press release

© European Commission

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