Who invented the Single Euro Payments Area ( ) concept? is a European Union ( ) 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 European Central Bank (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 representing 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 ‘related links’ below). In the related article published in the Newsletter in October 2009, (see ‘related articles in previous issues’ below), 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. Offering both the legacy and the new products in parallel would prove a costly business for payment providers. 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. It would also raise awareness regarding the project.” In response to the public consultation carried out by the European Commission, a “majority of respondents also indicated their preference for a regulation at European level so as to provide a clear signal to market participants that migration was now irreversible.” 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.
In June 2010, the Commission services concluded that “there is a need of binding legislation fixing a mandatory date for migration”, (see the Commission Services Working Paper, entitled: ‘ Migration End Date’ included in the ‘related links’ below).
Who determines the compliance requirements, including mandatory migration deadlines, relevant to that must be met by payment service users and 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 (national ministers)3, published the proposal for an Regulation to effectively mandate deadlines for migration to . The vast majority of European laws are adopted jointly by the European Parliament and the Council of the under the so-called ordinary legislative procedure. This legislative procedure gives the same weight to the European Parliament and the Council of the in a wide range of areas. A ‘regulation’ adopted by the legislator is a binding legislative act. It must be applied in its entirety across the . For more information on the legislative process, refer to the ‘related links’ below. The European Parliament and the Council of the reached agreement on the 1 February 2014 deadline for migration to applicable in the euro area in December 2011.
In February 2012, the legislator, (i.e. the European Parliament and the Council of the representing Member States), formally adopted the ‘Regulation ( ) No 260/2012 establishing technical and business requirements for credit transfers and direct debits’ (the Regulation). The Regulation defines 1 February 2014 as the deadline in the euro area for compliance with the core provisions of this Regulation. From 1 February 2014 onwards, organisations making payments in the euro area will have to carry out credit transfer and direct debit transactions in line with the core provisions set out in the Regulation. Effectively, this means that as of 1 February 2014, existing national euro credit transfer and direct debit schemes in the euro area will be replaced by Credit Transfer and Direct Debit. The Regulation is the first legislative act in the context which defines also compliance requirements to be met by payment service users. (Earlier payments legislation adopted between 2001 and 2009 focused on engaging payment service providers in the process. For more information, refer to the Website page, entitled ‘ Legal and Regulatory Framework’ included in the ‘related links below’.)
According to the institutions and governments, what are the benefits for payment service users? According to the governments and the institutions driving the programme, further integration of the euro payments market will result in faster, more efficient payment services for payment service users in a more competitive market.
The impact of however, transcends monetary policy and payment services. The European Commission expects the legal and technical harmonisation exercise to streamline business processes by replacing paper-based procedures with standardised electronic solutions such as e-invoicing, for example. These objectives are also set out in the European Commission Communication ‘A Digital Agenda for Europe’, May 2010 (see ‘related links’ below).
Who is responsible to enforce the law which mandates migration to ? National competent public authorities designated by Member States.
The list of designated national authorities responsible for ensuring compliance with the Regulation is available on the European Commission Website (see ‘related links’ below). Article 11 (“Penalties”) of the Regulation states: “Member States shall, by 1 February 2013, lay down rules on the penalties applicable to infringements of this Regulation and shall take all measures necessary to ensure that they are implemented.” Article 11 of the Regulation further requires Member States to notify the European Commission of those rules and measures by 1 August 2013. The is not aware that the European Commission would have published information on penalties applicable in Member States with regard to infringements of the Regulation.
Who is responsible for educating the general public on the objectives? In March 2009, the European Parliament reiterated: “SEPA is (...) a major public policy initiative reinforcing the Economic and Monetary Union.” In the view of the it is the responsibility of the governments and the institutions responsible for financial integration to communicate the objectives to European citizens, businesses and public entities impacted by . This is in line with what was done for the euro introduction.
If I would like to discuss the objectives determined by the governments and the institutions, who should I talk to? If this should be the case and if you are an citizen, the recommends contacting relevant representatives of your national government (finance ministers, for example) acting on behalf of your country in the Council of the representing Member States and / or your representatives in the European Parliament.
As clarified above, is an integration initiative pursued by the governments and the institutions, i.e. the European Commission, the European Parliament, the Council of the representing Member States and the ECB. These public authorities have defined the objectives as well as the actions to be taken by market participants on both the demand and supply sides of the payments market required, in the view of the authorities, to realise the political vision.
So, what’s the job of the European Payments Council ( ) then? At the request of the authorities, the developed, in close dialogue with the stakeholder community, the harmonised payment schemes for electronic euro credit transfers and euro direct debits which help to realise .
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, the developed, among other things, the Credit Transfer and Direct Debit Schemes. The is an international not-for-profit association which makes all of its deliverables available to download free of charge on the Website.
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. The is therefore, not in a position to address concerns of any citizen with regard to policies in the area of payments determined by the institutions.
To learn more about the specific responsibility of the in the process, please refer to the Blog, entitled: ‘Next Generation Credit Transfer and Direct Debit Rulebooks Will be Published in November 2014 to Take Effect in November 2015. Invites Suggestions for Changes by 28 February 2014’ and this dedicated Website page: ‘About ’ (see ‘related links’ below).
Javier Santamaría is the Chair of the .
EPC Blog (October 2013): Next Generation SEPA Credit Transfer and SEPA Direct Debit Rulebooks Will be Published in November 2014 to Take Effect in November 2015. EPC Invites Suggestions for Changes by 28 February 2014
Website: About EPC
Related articles in this issue:
SEPA 2014 - the European Central Bank Reiterates: "Everybody Has to be Ready on 1 February 2014 or Risk Disruptions in Their Individual Handling of Payment Orders." European Central Bank publishes second SEPA migration report and warns against risks of 'Big Bang' migration scenario
SEPA 2014 - the State of Play (October 2013): a Large Majority of Stakeholders Are Expected to Meet the 1 February 2014 Migration Deadline. Late Movers Must Catch Up. Now. The most significant risk to business operations is non-compliance, i.e. failure to meet the SEPA migration deadline applicable in the euro area mandated by EU law
Related articles in previous issues:
Financial Crisis. SEPA can be part of the solution. By Charlie McCreevy. ( Newsletter, Issue 1, January 2009)
Every Road has Got to End Somewhere: the Need for a SEPA Migration End Date. Re-emphasised by the European Central Bank ( Newsletter, Issue 2, April 2009)
Towards a SEPA Migration End Date? Commission services publish feedback on public consultation on possible end date(s) for SEPA migration ( Newsletter, Issue 4, October 2009)
Clarity and Incentives Needed. ECOFIN conclusions of December 2009 on setting an end date for migration to SEPA ( Newsletter, Issue 5, January 2010)
SEPA in the Context of the Financial Crisis. Retail payments business proves to be resilient ( Newsletter, Issue 7, July 2010)
More Europe is Needed, Not Less. Lessons learnt from the financial crisis ( Newsletter, Issue 10, April 2011)
1 The Council of the European Union: http://www.consilium.europa.eu/council.
2 The vision was set out by governments in the Lisbon Agenda, March 2000, which aims to make the more dynamic and competitive. For more information, refer to the ‘related links’ included with this article.
3 European Commission Website: http://ec.europa.eu/atwork/index_en.htm.
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