European Central Bank: The migration deadline for the Single Euro Payments Area (SEPA) on 1 February 2014 marks the start of a new phase in the creation of an integrated market for retail payments in euro.

Consumers and businesses should now be able to fully reap the benefits of using a single account for all their domestic and cross-border direct debits and credit transfers – notably, lower costs and greater competition.

European Payments Council (EPC):

The European Commission commented in December 2011 on the agreement by the European Parliament and the Council of the EU representing EU Member States on the 1 February 2014 deadline for compliance with the ‘Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro’: “The reasonable transition periods applied will allow customers and banks to get used to the adjustments in domestic payment transactions, provide legal certainty, avoid the cost of operating dual payments systems and bring forward the substantial future benefits of SEPA.”

The formal 1 February 2014 migration deadline applies in 17 euro area countries. On 20 January 2014, the European Central Bank stated: “The December [2013] figures show that, if the current pace of migration continues, the vast majority of stakeholders will complete their migration by 1 February 2014.” The latest qualitative SEPA indicators published by the European Central Bank in January 2014 confirm this outlook. The qualitative indicators take into account the specificities of the respective country with regard to migration progress by payment service providers (PSPs), ‘big billers’, public administrations and small and medium-sized enterprises (SMEs). According to this data, which reflects the assessment of national central banks, it is expected that on 1 February 2014 all PSPs, ‘big billers’ and public administrations will be ready. SMEs in 15 euro area countries are expected to achieve SEPA-compliance by this date.

To avoid difficulties for market participants in the euro area that have not achieved compliance with Regulation (EU) No 260/2012 on time, the European Commission introduced on 9 January 2014 a proposal to “give an extra transition period of six months during which payments which differ from the SEPA format can still be accepted” after 1 February 2014. The EU co-legislators, i.e. the European Parliament and the EU government ministers represented in the Council of the EU, indicated that they intend to finalise the legislative process required to amend Regulation (EU) No 260/2012 as proposed by the European Commission in the course of February 2014.

Consequently, payment service users and providers in the euro area are forced to determine their course of action as of 1 February 2014 based on the assumption that the EU co-legislators will amend Regulation (EU) No 260/2012 to effectively delay the migration deadline in the euro area to 1 August 2014 and the application of penalties for processing payments that do not comply with this Regulation to 2 August 2014. Market participants will also have to rely on the assumption that a new EU Regulation amending Regulation (EU) No 260/2012 will “have a retroactive effect as from 31 January 2014” as proposed by the European Commission.

SEPA Fact Check: The SEPA Benefits Projected by EU Governments, the European Parliament, the European Commission and the European Central Bank (1999 - 2013)

SEPA and migration - Frequently Asked Questions