14 October 2009

Commissioner McCreevy:”It is essential that banks adhere to the SEPA Direct Debit Scheme”

The EPC SEPA Direct Debit Scheme is innovative and provides a framework for SEPA’s flagship product. As a result, all direct debits, whether domestic or cross-border, are provided under the same essential conditions and modalities throughout the SEPA area

McCreevy presented the challenges that stakeholders will face with the new SEPA Direct Debit scheme and summarised the following areas which the Commission is working on to support the SEPA project.

Transposition of the Payment Services Directive: the Commission has worked with Member States and stakeholders to ensure complete and consistent PSD transposition. From the latest news received, it seems that some Member States will unfortunately not be ready in time, namely, Sweden, Poland, Estonia, Latvia, Slovakia and Greece.

The Commission has tried to clarify some legal issues in relation to the SEPA Direct Debit: industry has complained about the lack of legal clarity concerning a long-term business model for the SEPA Direct Debit that is compatible with competition rules. The Commission and the ECB have provided, in their statement of 24 March, guidance to the market and stand ready to provide more in the future. As regards the short term, legal clarity on financing mechanisms has been provided by the new Regulation on cross-border payments.

However: the one remaining obstacle is the absence of guarantees in all Member States on the continued legal validity of existing Direct Debit mandates when migrating to the SEPA Direct Debit. Based on the latest news received, with the important exception of Germany, this no longer seems to be a problem within the euro area.

A clear SEPA Road Map has been adopted: the Commission’s September Communication sets out a SEPA Roadmap for the period 2009 to 2012 and aims at injecting new dynamism and increased commitment into the whole SEPA project. The Road Map identifies individual actions with clear deadlines under six priority areas to achieve full SEPA implementation. There will be close monitoring of the progress achieved in fulfilling the actions in line with the timetables defined.

The Commission is actively monitoring SEPA migration by public administrations: it is publishing a regular benchmarking survey on public administrations’ migration to the SEPA Credit Transfer in order to build peer pressure and foster migration. Much to the Commission’s regret, its second survey published in July reveals that public authorities appear to be lagging behind rather than leading the market, although some Member States recently indicated that significant volume increases can be expected in the next twelve months.

Reflection on an end-date: the Commission published at the end of September, the results of an extensive public consultation on SEPA’s end-date. McCreevy, believes that there are strong economic and societal arguments in favour of setting an end-date also many stakeholders (both on the demand and supply side of the market)share this view. A significant number of stakeholders still consider that it is premature to talk about full migration to SEPA products, whose quality still remains to be demonstrated. There still appears to be some political reluctance to discuss this issue. Most Member States are hesitating to commit themselves, at a moment, when the SEPA Direct Debit is still on its launch pad and SEPA’s benefits are still theoretical. Over the next few months the Commission will, therefore, carefully consider and analyse how best to progress with this file at EU level and to build political support. McCreevy said the Commission would strongly call on the payment services providers to speed up their SEPA migration in the coming 12 months and to increase the SEPA offerings with competitive pricing.

Full speech

© European Commission