In an article in payments journal Speed, Hartsink - who is senior EVP of European Union affairs and market infrastructures at ABN Amro - says banks will not meet the 1 January 2008 Sepa deadline for direct debits because Europe's lawmakers have failed to pass legislation underpinning Sepa.

Lawmakers were expected to pass the PSD legislation by the end of 2006.

Hartsink says existing national laws will work for cards and credit transfers but not for direct debits. As a result banks will meet the Sepa deadlines for cards and for credit transfers, but will have to wait for the PSD to be passed before being able to implement measures for direct debits.

"Because of the PSD, we cannot continue to promise 1 January 2008 for direct debits. But this is beyond the control of banks," Hartsink told Speed.

He says the current German EU presidency may be able to pass the PSD before April 2007 in one reading. If this happens then - after allowing 18 months for transposition into national laws - Sepa-related direct debit services will be delivered by banks at the earliest in Q4 2008.

Hartsink also says the public sector in Europe has failed to take a lead in moving their own payments to Sepa and do not have enough resources to manage this work before the deadline of 1 January 2008.