EPC: If you have not migrated to SEPA yet – act now!

08 May 2013

Organisations that have not yet started migration should act immediately in order to be compliant before February 2014. Whilst good progress has been achieved by the corporate sector preparing for the transition, the focus should now be on joining forces to assist SMEs.

In the latest EPC Newsletter, Wiebe Ruttenberg of the European Central Bank (ECB) summarises the main findings of the first SEPA migration report, published by the Eurosystem in March 2013. The Eurosystem comprises the ECB and the national central banks of the EU Member States whose currency is the euro. The first SEPA migration report describes the state of play of the migration process across countries in the euro area and provides guidance on the management of the transition process. With less than nine months left, migration to SEPA is entering its most critical stage.                   

The Eurosystem report stresses that late migration is highly undesirable in projects like SEPA, where many technical details need to be reflected in end-users’ back-office systems and internal processes. The Eurosystem therefore strongly advocates that all payment service providers (PSPs) have their customer servicing channels ready for SEPA transactions by the end of the second quarter of 2013 and that all other stakeholders, including ‘big billers’, public administrations and SMEs, migrate at the earliest stage possible, preferably by the third quarter of 2013 at the latest. This approach avoids risks which otherwise could impact the wider supply chain, and ensures timely SEPA migration. End-users, such as public administrations and businesses, big and small, have to get ready for the SEPA payment instruments, otherwise they risk refusal of payment transactions by PSPs from 1 February 2014. Wiebe Ruttenberg points out:

• There is no Plan B: migration to SCT and SDD is required by law, not only for PSPs, but also for big billers, SMEs, public administrations and consumers.
• Operating outside the law is not an option, neither in terms of reputation nor from the business perspective. The ability to initiate payments would come at a higher cost, and reconciliation would become more problematic.
• PSPs will be obliged to refuse further processing of payments that are not delivered to them in the right technical format after the 1 February 2014 deadline applicable in the euro area.
• Ignoring the risks of non-compliance, including the hope of a slow response on the part of the responsible authorities, would be a mistake.

As highlighted in the ECB-press release of 21 March 2013, the first SEPA migration report “shows that most corporations have already completed the planning phase and know what SEPA will mean for them in practical terms. However, when it comes to the actual implementation, a number of companies have adopted very late internal deadlines, even as far as to the end of 2013. This is a source of concern in particular when it comes to the migration to the SDD scheme. More worryingly, SMEs and local public administrations’ awareness of SEPA is still fragmented and the level of preparedness is rather poor.”

The EPC fully supports the ECB’s recommendation that payment service users should aim to complete migration at the earliest stage possible, also taking into consideration that availability of external resources offered by banks and other service providers – including testing facilities – will be stretched to the limit towards the end of the year. Organisations now working towards achieving compliance with the SEPA Regulation are invited to take advantage of the support offered by the banking industry and other service providers to assist market participants during the transition.

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