Europe extends SEPA transition with 6 months to ultimately August 2014

January 10, 2014  |  Europe, Featured Articles, Payment

Europe extends SEPA transition with 6 months to ultimately August 2014That is what European Commissioner Michel Barnier (Internal Market) proclaimed on Thursday 9 January 2013. The European Commission considers this measure necessary in order to reduce the likelihood of both domestic and cross border payment disruptions.

Technically, the current deadline of February 1 remains in effect, but the European decision enables an ultimate additional transition period of six months during which domestic payments without IBAN number can still be made, in other words: payments that not yet meet the new European standard.

Press Release

Internal Market and Services Commissioner Michel Barnier said:

  • “An efficient Single Market needs an efficient SEPA. The entire payments chain - consumers, banks, and businesses - will benefit from SEPA and its cheaper and faster payments. Cross-border payments are no longer exceptional events which is why an efficient cross-border regime is needed.
  • As of today, migration rates for credit transfers and direct debits are not high enough to ensure a smooth transition to SEPA despite the important work already carried out by all involved.
  • Therefore, I am proposing an additional transition period of 6 months for those payment services users who are yet to migrate. In practice this means the deadline for migration remains 1 February 2014 but payments that differ from a SEPA format could continue to be accepted until 1 August 2014.
  • I regret having to do this but it is a measure of prudence to counter the possible risk of disruption to payments and potential consequences for individual consumers and SMEs in particular.
  • There has been evidence in the past few months and I have warned many times that migration was happening too slowly and call once more on Member States to fully assume their responsibilities and accelerate and intensify efforts to migrate to SEPA so that all can enjoy its benefits, that is, faster and cheaper payments across Europe. The transition period will not be extended after 1 August.”

The full press release can be found here

 

SEPA and IBAN

Just to freshen up your memory: SEPA stands for Single Euro Payments Area. It enables uniformity in payments accross 33 European states.

Because of SEPA bank account numbers are changed to an uncomfortable 18 letters and digits. It is a combination of a current account number, added with a country code, a control number and 4 letters that identify your bank.

Because of SEPA, companies need to:

  • adjust their letterheads with their IBAN number
  • adjust their online communication signatures
  • make changes in their financial software
  • use a completely new standard: ISO200022 XML
  • work with – in most of the times- much longer bank account number
  • increase automation to reduce the error rate because if these extended account numbers.


Related Posts


Comments are closed.