(Note: the European Payments Council is not part of the EU institutional framework.)
To appreciate the views of the European and national public authorities on the Single Euro Payments Area () it must be recalled that is a European Union (EU) payment integration initiative pursued by the EU governments and the EU institutions, i.e. the European Commission, the European Parliament, the Council of the EU representing EU Member States and the European Central Bank (ECB), since the late 1990s. This blog cites the rationale for as defined by the EU governments and EU institutions driving the programme. The author also clarifies (again): compliance requirements, including mandatory migration deadlines, relevant to that must be met by payment service users and payment service providers in the EU are determined by the EU legislator, i.e. the European Parliament and the Council of the EU representing EU Member States (not by the European Payments Council). With regard to the 1 February 2014 migration deadline applicable in the euro area mandated by EU law, the EU authorities have warned time and again that all market participants must ensure compliance or else risk that payments could be disrupted.
Who invented the concept? is an integration initiative in the area of payments. With the introduction of the euro currency in 1999, the political drivers of the initiative – governments, the European Parliament, the European Commission and the ECB – have focused on the integration of the euro payments market.
Why is there an law that mandates migration to ? During a public consultation carried out by the European Commission in 2009, a majority of respondents echoed requests by the ECB, the European Parliament and the Council of the EU representing EU Member States “for a regulation at European level so as to provide a clear signal to market participants that migration was now irreversible.”
In September 2009, the European Commission services published the results of a public consultation on whether and how deadlines should be set for the migration of existing national credit transfers and direct debits to the new harmonised payment schemes (the report is included in the links below). In the related article published in the Newsletter in October 2009, Véronique Margerit, Seconded National Expert with the European Commission’s Directorate General Internal Market and Services, reported: “The results of the public consultation showed that a large majority of respondents support the idea of setting some end-dates to stimulate migration to credit transfers and direct debits. The project holds much promise in terms of improved efficiency, dynamism and competitiveness of the European economy. (...) In addition, setting clear deadlines for the migration to would (...) provide certainty and allow for the appropriate planning of migration, as well as the attribution of the necessary budgets.” The European Payments Council shares the view that an end date for phasing out legacy euro payment schemes for credit transfers and direct debits ensures planning security for all market participants.
Who determines the compliance requirements, including mandatory migration deadlines, relevant to that must be met by payment service users and payment service providers in the ? The legislator, i.e. the European Parliament and the Council of the representing Member States.
On 16 December 2010, the European Commission, which has the right of initiative to propose laws for adoption by the European Parliament and the Council of the EU representing EU Member States, published the proposal for an EU Regulation to effectively mandate deadlines for migration to . In February 2012, the EU legislator, (i.e. the European Parliament and the Council of the EU), formally adopted the ‘Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits’ (the Regulation). From 1 February 2014 onwards, payment service users and payment service providers in the euro area will have to carry out euro credit transfer and direct debit transactions in line with the core provisions set out in the Regulation. Effectively, this means that as of this date, existing national euro credit transfer and direct debit schemes in the euro area will be replaced by Credit Transfer () and Direct Debit (SDD). In non euro countries, the deadline will be 31 October 2016.
Avoid the risks of non-compliance. The authorities have warned time and again: “After 1 February 2014 payment service providers will not be allowed to process payment orders that do not comply with the legal requirements as laid down in applicable law.”
Migration to is mandated by law (not by the European Payments Council)
As outlined above, compliance requirements that must be met by payment service users and payment service providers in the are determined by the legislator, i.e. the European Parliament and the Council of the representing Member States – not by the European Payments Council (). The is not an legislative body. More generally, the is not part of the institutional framework. The is one stakeholder group among many impacted by the policy-maker-driven programme. The is not responsible for the overall management of the process. When the governments and institutions first launched the process in the late 1990s, the authorities expected the banking industry to contribute the resources required to develop European instruments for electronic euro payments.
In response to these expectations repeatedly articulated by the authorities, the European banking sector created the in 2002. In close dialogue with the stakeholder community and as requested by the authorities, the developed, among other things, the and SDD Schemes. The is an international not-for-profit association which makes all of its deliverables available to download free of charge on the Website. To learn more about the specific responsibility of the in the process, please refer to the dedicated Website page: ‘About ’ (see links below).
- Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro (the SEPA Regulation)
- EPC Newsletter (October 2013): SEPA Fact Check: The SEPA Benefits Projected by EU Governments, the European Parliament, the European Commission and the European Central Bank (1999 - 2013). SEPA is an EU integration initiative driven by EU governments and the EU institutions. Note: the European Payments Council is not part of the EU institutional framework
- EPC Blog (August 2012): Friendly Reminder: EU Law Mandates Migration to SEPA by February 2014 in Euro Area. Recommendation is to Rely on EU Legislator (Not on Speculations Regarding the Impact of the Euro Debt Crisis on SEPA) when Planning Migration. The Time to Act is Now.
- European Commission SEPA Website
- Council of the European Union Website
- European Central Bank SEPA Website
- European Commission: Feedback on the Public Consultation on Possible End-Date(s) for SEPA Migration (September 2009)
- European Parliament/EuroparlTV Website: Video 'How it works: European Laws'
- European Parliament Website: Legislative Powers
- European Commission Website: Application of EU Law/Regulations
- EPC Website: About SEPA - SEPA Legal and Regulatory Framework
- EPC Website: About SEPA - The Political Initiators
- EPC Website: About EPC
- The EPC Migration Tool Kit: Get Ready for SEPA by 1.2.2014
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