ECB calls for law enforcing Sepa migration

The European Central Bank (ECB) on October 22 called for legislative action to set a date by when firms have to move to the Single Euro Payments Area (Sepa) schemes, as the banking industry's self-imposed deadlines had proven ineffective.

The envisaged regulation establishing Sepa migration end dates for the direct debit and the credit transfer schemes would, the ECB said, "be a key element for the timely and smooth adoption of Sepa".

To create the necessary momentum to bring the Sepa project to completion, the ECB said it "strongly supports the work of European legislators to create the necessary momentum to bring the Sepa project to completion" and that a "mandatory timeline for the migration to Sepa would significantly accelerate the pace of transition". The ECB said legislative action could pave the way for completion of the scheme by the end of 2012 for credit transfers and by the end of 2013 for direct debits.

"Sepa is progressing from the market-driven phase of design and implementation to the phase of mandatory migration, aiming to ensure the necessary adoption really takes place," said Gertrude Tumpel-Gugerell, a member of the executive board of the ECB and co-chair of the Sepa council. "At this stage, Sepa faces a number of specific challenges that only the market and the regulators together can master."

The central bank said that, despite some progress towards Sepa migration, the banking industry's self-imposed deadline of December for Sepa credit transfers and direct debits would not be met. In August, only 9.3% of all credit transfers processed in the eurozone were Sepa credit transfers. Since its launch in November 2009, Sepa direct debits have remained at a share well below 1% of all direct debit transactions processed in the eurozone.

In June, the Sepa Council, a group representing European payment service providers and consumers, proposed establishing separate end dates for Sepa direct debit and Sepa credit transfer migration, with a 12-month end date from the time of enforcement on credit transfers and 24 months on direct debts. However, public consultations on end dates released in August by the European Commission showed resistance from some groups to proposals made by the Sepa Council to have a different end date for credit and debit transfer migration, with others preferring no end dates at all.

During the migration phase, national payment schemes will co-exist with the new Sepa schemes. Customers will be offered both schemes, and the clearing and settlement infrastructures will be able to process payments using both. The original goal was to achieve gradual market-driven migration to Sepa.