The April 2013 edition of the quarterly Newsletter again offers information to support market participants in the euro area in getting ready for the Single Euro Payments Area ( ) by February 2014 (see links below), as mandated by European Union ( ) law. Organisations that have not yet started migration should act immediately to ensure that they implement the required measures in order to be compliant before February next year. Whilst good progress has been achieved by the corporate sector preparing for the transition, the focus should now be on joining forces to assist, in particular, small and medium-sized enterprises (SMEs) and local public administrations in the euro area that must meet the 1 February 2014 deadline. This requires coordinated efforts by national public authorities and trade associations representing businesses and banks.
Don’t count on a Plan B
In the latest Newsletter, Wiebe Ruttenberg of the European Central Bank (ECB) summarises the main findings of the first migration report, published by the Eurosystem in March 2013 (see link below). The Eurosystem comprises the ECB and the national central banks of the Member States whose currency is the euro. The first 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 is entering its most critical stage.
The Eurosystem report stresses that late migration is highly undesirable in projects like , 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 ( ) have their customer servicing channels ready for 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 migration. End-users, such as public administrations and businesses, big and small, have to get ready for the payment instruments, otherwise they risk refusal of payment transactions by from 1 February 2014. Wiebe Ruttenberg points out:
- There is no Plan B: migration to and is required by law, not only for , 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.
- 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 (see link below), the first migration report “shows that most corporations have already completed the planning phase and know what 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 scheme. More worryingly, SMEs and local public administrations’ awareness of is still fragmented and the level of preparedness is rather poor.”
“Adapting to involves adjusting a lot of technical and business procedures over a limited period of time. Projects of this kind should not be left to the last moment,” said Benoît Cœuré, Member of the Executive Board of the ECB. “I hope that all stakeholders will take migration to payment instruments as a top priority.”
Learn to love : act now
The 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 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. Relevant information is also made available with ‘The Migration Tool Kit’ (see link below). The experience of pioneers on the demand side confirms that compliance is manageable and feasible, but with less than nine months to go until the 1 February 2014 deadline, it is critical that any late movers put processes in place to begin their migration immediately. There is only Plan A. Act now.
- EPC Newsletter article by Wiebe Ruttenberg (April 2013): ‘SEPA Migration - Don't Count on a Plan B. European Central Bank Publishes First SEPA Migration Report and Warns Against Risks of Late Migration’
- EPC Newsletter article by Javier Santamaría (April 2013): ‘Learn to Love SEPA: the 1 February 2014 Migration Deadline Mandated by European Union Law Will Not Go Away’
- EPC Newsletter article by Javier Santamaría (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 article by Etienne Goosse (April 2013): ‘Progress Is Promising: First Qualitative SEPA Indicators Measure Level of Preparedness by Stakeholder Groups at Country Level’
- European Central Bank: First SEPA Migration Report (March 2013)
- European Central Bank Press Release (21 March 2013): ‘ECB Publishes First SEPA Migration Report and Warns Against Risks of Late Migration’
- 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 EPC Migration Tool Kit: Get Ready for SEPA by 1.2.2014. Act Now!
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