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Commission sets deadlines for migration to SEPA

The European Commission has today proposed to set EU-wide end-dates for the migration of the old national credit transfers and direct debits to the recently created Single Euro Payments Area (SEPA) instruments.

It will mean that national credit transfers and direct debits are phased out and the recently created pan-European systems take their place, respectively 12 and 24 months after the entry into force of the Regulation.

This will reduce the costs of payments, increase competition and make cross-border payments as easy as domestic ones. The Commission's proposal now passes to the European Parliament and the Member States for consideration.

Internal Market and Services Commissioner Michel Barnier said: "We have a Single Market, many countries share a single currency and soon we will move to a single pan-European payment system in Europe. It means that making payments cross-border will become as easy as making them at home. Consumers will only need one bank account and their payments will be faster, cheaper and safer. Businesses will benefit from one set of standards and much simpler processes. The proposal adopted today fixes end-dates to make this pan-European system a reality, hopefully as early as 2012."

Self-regulatory efforts have proven not to be sufficient to drive forward concerted migration to SEPA. According to available European Central Bank (ECB) data, as of October, only 9.6 % of all credit transfers in the euro area were executed using a pan-European payment instrument.

If this trend continues, the full benefits or implementation of the SEPA would only be felt after more than 25 years. Only rapid migration to pan-European SEPA credit transfers and direct debits, will generate the full benefits of an integrated payments market. The proposed Regulation aims to ensure a quick and smooth migration to pan-European credit transfers and direct debits by phasing out the existing national payment instruments.

In order to ensure interoperability, the use of certain common standards and technical requirements such as the use of international bank account numbers (IBAN), bank identifier codes (BIC) and a financial services messaging standard (ISO 20022 XML) will be mandatory for all bank account payments in euro in the EU. The proposed regulation also takes into account user concerns such as the possibility to limit a direct debit collection to a certain amount and/or frequency of payments. Banks and companies which send out a large number of bills (for example electricity or telecommunications providers) are encouraged to adopt measures to make SEPA migration as easy as possible for bank account holders.

The proposed Regulation also aims to increase transparency and competition between payment services providers and between payment services themselves, notably through the ban on hidden fees between banks for direct debit transactions, which are currently charged in six Member States (Spain, France, Sweden, Belgium, Portugal and Italy).


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