The European Central Bank (ECB) says self-regulation on Sepa has not achieved the expected results and is calling on legislators to now set a mandatory migration timeline.
In its seventh Sepa progress report, the ECB says there has been genuine progress on migration for project designed to enable customers to make cashless euro payments to anyone located anywhere in Europe, using a single account and a single set of instruments.
There are 32 European countries participating in the project and more than 4400 banks have joined the Sepa credit transfer scheme, with 3000 signed up for the Sepa direct debit scheme.
However, the banking industry's self-imposed deadline of December 2010 for Sepa credit transfers and direct debits to be in general usage will not be met.
By August 2010 only 9.3% of all credit transfers processed in the euro area were Sepa. Since its launch in November 2009, Sepa direct debits remain at a share well below one per cent of all DD transactions processed in the euro area.
Therefore, the ECB warns that European legislators now need to take action, setting a mandatory timeline for migration and the discontinuation of national instruments to ensure Sepa is completed, "preferably" by the end of 2012 for credit transfers and by the end of 2013 for direct debits.
The Eurosystem is "confident" that concerns raised by market participants on the envisaged regulation on migration end dates "will be properly addressed by the European authorities".
In addition to deadlines, the ECB also identifies other issues that need to be addressed, including the provision of "innovative" payment services such as online and mobile, the creation of a new European card scheme and the phasing out of magnetic stripe on cards.
Gertrude Tumpel-Gugerell, member, executive board, ECB, says: "Sepa is progressing from the market-driven phase of design and implementation to the phase of mandatory migration, aiming to ensure that the necessary adoption really takes place. At this stage, Sepa faces a number of specific challenges that only the market and the regulators together can master. I hope that the constructive cooperation between all stakeholders will become even closer in the decisive two to three years ahead, so that our joint efforts help us to achieve the final goal: an attractive integrated and competitive European market for euro payment services."
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