Over a year after its launch, the Sepa credit transfer (SCT) scheme still only accounts for less than two per cent of total CT volume in the euro area, prompting ECB executive board member Gertrude Tumpel-Gugerell to call for a definitive date for migration from national systems."We need a migration end date from which on onwards only the European payment instruments will exist. We all know that it is inefficient and costly if two schemes continue to run in parallel for a prolonged period of time," says Tumpel-Gugerell in a speech to a workshop organised by Parsifal Frankfurt.
Almost all of the 4500 banks active in the payment business in Europe are now able to offer and process SCTs. Likewise, most retail payment infrastructures that were processing credit transfers in euros have become SCT scheme-compliant.
Yet, despite the fact the Sepa project has been ongoing for about seven years and that a lot of product design and standardisation work has been undertaken, the practical implementation continues to be slow - just 1.9% of total credit transfer volume in the euro area are SCT transactions.
Tumpel-Gugerell says banks see the responsibility for take-up on the side of corporations and public administrations. But, despite claiming to see the benefits of Sepa, firms are still taking a cautious approach to implementation.
Many cite the difficulties associated with obtaining Iban and BIC information as a major obstacle, although Tumpel-Gugerell says this should be overcome through the provision of good quality services for deriving Iban from national account numbers and reliable directory services.
Says Tumpel-Gugerell: "Maintaining national instruments implies that fragmentation along national borders is preserved, and that the integration of the European retail market has failed. Thus, working towards the establishment of a migration end date is deemed of the utmost importance to make the Sepa a success."
With the SCT scheme witnessing slow take-up, Tumpel-Gugerell also raises fears about the launch of the Sepa direct debit (SDD) scheme, slated for 1 November.
She warns "solutions are required for practical implementation issues such as the ongoing legal validity of existing direct debit mandates, reachability of direct debit payees and in particular the multilateral interchange fee".
The EC is challenging the need for this transaction fee and Tumpel-Gugerell says it needs to continue working with the banking sector and ECB because the "issue needs be resolved urgently so as not to endanger the launch of the SDD".
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