SEPA Customers

The EPC Migration Tool Kit: Get Ready for SEPA

  

The Single Euro Payments Area (SEPA) is a European Union (EU) integration initiative in the area of payments pursued by the EU institutions. These are the European Commission, the European Parliament, the Council of the EU representing EU governments and the European Central Bank. SEPA compliance requirements that must be met by payment service users and providers are determined by the EU institutions in accordance with their specific competences. On 16 December 2010 the European Commission, which has the right of initiative to propose laws for adoption by the EU co-legislators, published the proposal for an EU Regulation to effectively mandate deadlines for migration to SEPA.

(Note: the European Payments Council (EPC) is not an EU legislative body. More generally, the EPC is not part of the EU institutional framework. The EPC has, therefore, no role in the adoption of any EU laws or other regulatory initiatives establishing SEPA compliance requirements.)

EU Regulation defines mandatory deadlines for migration to SEPA

In February 2012, the EU co-legislators, i.e. the European Parliament and the Council of the EU representing EU governments, adopted the 'Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009' (the SEPA Regulation; see link below). It defines 1 February 2014 as the deadline in the euro area for compliance with the core provisions of this Regulation. In non-euro countries, the deadline will be 31 October 2016. Effectively, this means that as of these dates, existing national euro credit transfer and direct debit schemes will be replaced by SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD).

To avoid difficulties for non-compliant market participants, in February 2014 the European Commission, the European Parliament and EU governments agreed amending the SEPA Regulation to give the option to continue processing non-SEPA formats until 1 August 2014 (see link to ‘Regulation (EU) No 248/2014 amending Regulation (EU) No 260/2012 as regards the migration to Union-wide credit transfers and direct debits’ below).

For more information, refer to this dedicated page on the EPC Website: SEPA Legal and Regulatory Framework.

Get ready for SEPA 2016. Act now

1 August 2014 does not mark the end of the migration process. The following deadlines also apply:

1 February 2016:

  • Transitional arrangements in EU Member States: the SEPA Regulation has introduced several possible exemptions regarding the use of the International Bank Account Number (IBAN), the Business Identifier Code (BIC) and the ISO 20022 XML message standards by the February 2014 deadline. EU Member States have discretion as to whether they will use any or all of the options to derogate from the 1 February 2014 deadline (until 1 February 2016) with regard to the use of the IBAN, the BIC and the ISO 20022 XML message standards by payment service users.
  • Niche products, which have been granted an exemption: the SEPA Regulation, in particular, stipulates that credit transfer and direct debit transactions with a cumulative market share of less than 10 percent in an EU Member State must comply with the provisions set out in this legislative act only by 1 February 2016.

31 October 2016: as mentioned above, non-euro countries will have to comply with the SEPA Regulation by that date.

It is important that, following 1 August 2014, countries in- and outside of the euro area do not overlook these other deadlines, but rather actively prepare to ensure that they are ready to meet them on time.

Coordination among all stakeholders involved in the migration process at national level is key

SEPA migration is coordinated at national level. Article 10 (“Competent authorities”) of the SEPA Regulation details how this legislative act is to be enforced. It clarifies that EU Member States must designate the competent authorities at national level responsible for ensuring compliance with this Regulation. The list of designated national authorities responsible to ensure compliance with the SEPA Regulation is available on the European Commission Website (see link below).

Meeting the next SEPA deadlines established by the EU lawmakers requires continued and coordinated efforts by the public authorities driving the SEPA process, the representatives of payment service users as well as banks and other service providers. In euro area countries that achieved high SEPA migration rates early in the process, the following factors contributed to ensuring an overall smooth transition: engagement and leadership by public authorities, cooperation of stakeholders based on a step-by-step implementation plan and targeted communication to ensure timely launch of migration projects at the level of individual organisations.

These actions are coordinated by National SEPA Coordination Committees. The European Central Bank makes available country-specific information including links to national SEPA websites and contact information of National SEPA Coordination Committees (see link below).

The EPC Blog, entitled ‘1 August 2014 Does Not Mark the End of the Migration Process. Get Ready for SEPA 2016. Act Now’ (see link below) summarises best practices identified in the euro area during the migration process. The recommendation is to take advantage of the lessons learnt when preparing for SEPA 2016.

Payment service users confirm: SEPA migration is manageable, feasible and beneficial

The SEPA Regulation affects not only payment service providers, but also payment service users such as corporates, small and medium sized enterprises, public administrations and government agencies. The representatives of payment service users, who reported on their successfully completed SEPA migration projects in the EPC Newsletter case studies section (see link below), stressed that the scope of change required to ensure SEPA compliance is extensive. They also confirm that timely migration to the new SEPA payment schemes and technical standards is manageable, feasible and beneficial. The benefits resulting from migration to SEPA include: more streamlined internal processes, lower IT costs, reduced costs based on bank charges, a consolidated number of bank accounts and cash management systems, and more efficiency and integration of any organisation’s payment business. 

The EPC Migration Tool Kit

Banks and other service providers are standing ready to support payment service users to complete the transition. Relevant information is also made available with ‘The EPC Migration Tool Kit’ (see links below).


Selection of articles from the EPC Newsletter and other sources

EPC Website: SEPA Credit Transfer (Includes Detailed Information on IBAN, BIC and ISO 20022 Message Standards)

EPC Website: SEPA Direct Debit (Includes Detailed Information on IBAN, BIC and ISO 20022 Message Standards)

EPC Newsletter (April 2011): SEPA Direct Debit for Billers: The SDD Mandate

EPC Newsletter (July 2011): SEPA Direct Debit for Billers: the Creditor Identifier (Go Get It!)

EPC Newsletter (October 2011): SEPA Direct Debit for Billers: the SDD Core Scheme Timelines

EPC Newsletter (January 2012): SEPA Direct Debit for Billers: the SDD Business To Business Scheme Timelines

EPC Newsletter (April 2012): SEPA Direct Debit for Billers: Exception Handling

Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009 (the SEPA Regulation)

Regulation (EU) No 248/2014 amending Regulation (EU) No 260/2012 as regards the migration to Union-wide credit transfers and direct debits

EPC Newsletter (April 2012): The Time to Act is Now: Impact of the SEPA Regulation on Payment Service Users

EPC Newsletter (April 2012): Early Movers Confirm: ISO 20022 Message Standards Generate Tangible Benefits. A guide for payment service users on the impact of provisions in the SEPA Regulation regarding the use of the ISO 20022 message standards

Payments Regulatory Expert Group (PREG): Practical Guidance for the Implementation of Regulation (EU) No 260/2012 Establishing Technical and Business Requirements for Credit Transfers and Direct Debits in Euro and Amending Regulation (EC) No 924/2009

Euro Banking Association: Banks Preparing for SEPA Migration. A Guide to the SEPA Migration End-Date Regulation

EPC Newsletter (April 2013): The Long Road to Harmonisation: Transitional Arrangements in European Union Member States Permissible Under Regulation 260/2012 (the SEPA Regulation)

European Commission Website: Information on Transitional Arrangements in EU Member States Permissible Under Regulation 260/2012 (the SEPA Regulation) and List of Competent Authorities Responsible for Ensuring Compliance

European Central Bank Website: National SEPA Contact Links

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26/08/2016