The European Parliament has voted in favour of proposals advanced by the executive European Commission (EC) to delay the migration deadline for the single euro payments area (SEPA) until 1 August 2014.
The confirmation of the compliance extension will ease some of the confusion caused by the EC’s unilateral announcement last month of a six-month delay from the original 1 February deadline. However, the European Central Bank (ECB) and others are unlikely to be impressed after rushing out figures themselves recently purporting to show that SEPA compliance had “gathered pace strongly”. The Eurosystem of central bankers in Europe has been continuing to urge corporates and banks to still aim for the original migration deadline at the start of this month, citing the recent upturn in SEPA Credit Transfer (SCT) compliance to 74% and 41% of SEPA direct Debits (SDDs).
The European Parliament’s move today, however, is likely to cause everyone else to fall into line with the EC extended timeframe and the European Council, comprising of national ministers in the European Union (EU), can be expected to follow suit quickly.
The Parliamentary vote confirming the extension helps to provide some legal certainty for the six month ‘grace period’ announced by the EC last month. It effectively gives businesses until 1 August 2014 to prepare their systems to accept SCTs and SDDs before legacy payment instruments are stopped.
“I am pleased the European Parliament has this morning approved a proposal that allows non SEPA compliant payments to continue for a limited period of time, until 1 August 2014, in parallel with SEPA compliant payments,” said internal market and services commissioner Michel Barnier of the EC in response to today’s developments, before reiterating that: “The objective is to ensure payments are not blocked in cases where stakeholders are not ready, and thus minimise any possible risk of disruption to payments for consumers and businesses, in particular SMEs.”
“Payment service users can be certain that their payments will continue to be processed, and those who have not yet migrated [now] have the time to do so,” continued Barnier. “The proposal will apply with retroactive effect.”