18 December 2014

B2B Payments

Andrew Owens - SunGard AvantGard

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Payments strategies 2015-2020-2030

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Does the new SEPA deadline really change anything?

10 January 2014  |  1735 views  |  1

You may have seen the big news today that the European Commission has announced a proposed extension to the SEPA migration deadline of six months, from 1st February to 1st August.  Their view is that the rates of adoption are not high enough to guarantee a smooth transition.  According to the latest migration stats available, credit transfer adoption is at 64.1% and direct debits at 26% (November 2013 figures).  Considering that in September, the direct debits migration figure was only at 5%, this was a big jump.  But obviously not enough to make the commission comfortable enough to stick with the Feb 1st date and force the change through.

Throughout 2013 it always looked like a very tall order to reach 100% (or even close to 100%) compliance across credit transfers and direct debits, with the problem being especially acute for SMEs.  But the commission was always firm that the date wouldn’t move.  Most of us assumed that other measures might be put in place including punitive costs.  So, whilst the adoption rates do not come as a surprise (actually, the recent increases have been more positive than one might expect), the announcement has been a surprise.

Corporations have been given some breathing space to become compliant and for some it will definitely have come as a welcome relief.  But, apart from the date, nothing else changes.  The migration to pan-European payment and direct debit instruments will happen and the potential benefits from embarking on payments centralisation across the Eurozone remain the same for large corporates.  Corporations can still look towards a SEPA migration project  as a catalyst for a wider payments centralisation project to take advantage of the opportunity to reduce costs while standardising processes.  You may be thinking that if the EC have moved the date once, they will move it again.  But for now, they seem very firm on the point that this is a one-time shift.


Comments: (1)

Mark Bradbury - Apply Financial Ltd - London | 13 January, 2014, 10:14

im not surprised by the announcement and think that given the circumstances it is the right thing to do. Punitive fines would have been difficult to deal with and created more headaches.


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