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 Newsletter (October 2014): SEPA Migration (Euro Area) Round Up: the Transition has been a Success Throughout the Region
- EPC Newsletter (July 2014): Get Ready for 2016 and Get Inspired - the Belgian Experience Shows that Timely Migration to SEPA Is Manageable and Feasible
- EPC Blog (17 July 2014): 1 August 2014 Does Not Mark the End of the Migration Process. Get Ready for SEPA 2016. Act Now
- EPC Newsletter (April 2013): If You Have Not Migrated to SEPA Yet - Get Ready and Get Inspired: SEPA Pioneers on the Demand Side Share Best Practice
- EPC Newsletter (October 2012): ‘Time is of the Essence: Get Ready for SEPA. Act Now!’ This Article Offers Detailed Information On How To Prepare SEPA Migration at the Level of Individual Organisations
- EPC Blog (February 2013): Get Ready for SEPA by 1 February 2014 and Get Inspired: Early Movers on the Demand Side Identify Best Practice - Part I
- EPC Blog (February 2013): Get Ready for SEPA by 1 February 2014 and Get Inspired: Early Movers on the Demand Side Identify Best Practice - Part II (SEPA Direct Debit)
- EPC Blog Series (Parts I-V) (February to May 2012): Get Ready for SEPA by February 2014. Early Movers on the Customer Side Share Lessons Learnt
- EPC Video (March 2012): 'SEPA for Billers. The Time to Act is Now': This Film is Available with Subtitles in the EU Languages
- EPC Newsletter: Case Studies Highlighting Successful SEPA Migration Projects of Bank Customers (Series Started April 2011)
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
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