The Council of the European Union (EU) has called on member states, banks and end users to redouble their efforts to meet the 1 February 2014 migration deadline for the single euro payments area (SEPA), amid concerns that companies are failing to adequately prepare.
At its latest economic and financial affairs meeting, the Council - made up of minsters from EU member states - reiterated its backing for the SEPA project and the upcoming migration deadline for SEPA credit transfers (SCTs) and direct debits (SDDs).
However, the Council observed that some stakeholders seem to be planning for a late SEPA migration and may be exposed to “undue operational risks impacting smooth handling of payments”.
The new SEPA formats involve considerable technological and procedural change as Europe harmonises its payment practices and charges. The mandating of the XML ISO 20022 messaging standard also involves technological change for some banks and payment processors and end users, but there are benefits in moving towards this global standard.
The Council is concerned not enough organisations will be ready for the 1 February 2014 migration deadline, however, expressing regret at the slow pace of preparation in most countries. It cited the European Central Bank (ECB) SEPA indicators and a recent report which highlighted the particular problems with small and medium enterprise (SME) migration and local public administrations, whose awareness of the programme is still “fragmented and the level of preparedness is rather poor”.
These end-users have to get ready for the switch-over, says the Council, warning that payment orders not submitted in the right format from 1 February 2014 onwards may not be processed.
For their part, member states should “significantly intensify communication measures” to deal with “public awareness gaps” about SEPA, concludes the Council, proposing the use of the general and business press, billboards and TV and radio advertising.
Banks and other payment service providers also need to step up their efforts to familiarise end-users on technical, business and contractual issues related to SEPA migration and provide assistance for the move. For a start, individual information letters should be sent out to corporate clients.