There is Only Plan A: Get Ready for SEPA by 1 February 2014 in the Eur...

There is Only Plan A: Get Ready for SEPA by 1 February 2014 in the Euro Area!

Facts and figures on SEPA migration: the state-of-play in January 2013

29 January 13

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European Union Regulation sets deadline for migration to the Single Euro Payments Area

As previously reported: on 30 March 2012, the 'Regulation () No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009', was published in the Official Journal of the European Union (). This legislative act is commonly referenced as the Single Euro Payments Area () Regulation (see 'related links' below). The Regulation defines 1 February 2014 as the deadline in the euro area for compliance with the core provisions of this Regulation. Effectively, this means that as of this date, existing national euro credit transfer and direct debit schemes will be replaced by Credit Transfer () and Direct Debit (SDD).

Get ready for by 1.2.2014. Act now at the very latest!

The 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 early movers on the demand side, who reported on their successfully completed migration projects in this newsletter (see 'related articles in previous issues' below), unanimously recommended that organisations which still have to achieve compliance become active as soon as possible. Since October 2012, the European Payments Council () has alerted market participants that this is no longer a recommendation but an imperative; i.e. there is no time to procrastinate further.

This edition of the Newsletter features a report on the migration experience of the Belgian energy company Electrabel GDF Suez (see 'related articles in this issue' below). This company implemented in a step-by-step process, which was concluded in 2012. It migrated to in 2011. Luc Waterlot, Financial Systems and Interfaces Manager at Electrabel GDF Suez Market & Sales and responsible for SDD implementation, comments: "Migration to and SDD is feasible, manageable and beneficial. Preparation, however, is everything and time is of the essence. The scope of the changes is extensive. At this point, it also needs to be taken into consideration that the migration approach adopted by Electrabel GDF Suez, i.e. migration to first followed by migration to SDD, is no longer an option. Organisations, which use credit transfers and direct debits, will have to manage migration to both and SDD in parallel within the next twelve months. In January 2013, the message is: any organisation, which still needs to achieve compliance should act now at the very latest or risks missing the 1 February 2014 deadline." Market participants in the euro area should note that failure to comply with the core provisions of the Regulation by this deadline risks infringing on EU law. The makes available comprehensive information to help market participants manage the transition. These sources are included with the 'related links' at the end of this article (refer to the ' Migration Tool Kit').

Corporate readiness

In December 2012, Steria published the freely available report ': Will European Businesses be Ready for the Transformation?' (see 'related links' below) prepared in collaboration with Edgar, Dunn & Company. The report focuses on corporate SDD readiness. The findings are based on a phone survey of 300 businesses with 250 to 5,000 employees in France, Germany and the UK and more than 15 in-depth interviews among large corporates and payments experts in Europe. Businesses in the UK, a non euro country, will have to comply with the Regulation by 31 October 2016. 70 percent of the businesses surveyed indicated that they had heard about SDD (87 percent in France; 75 percent in Germany; 26 percent in UK). The awareness of SDD among respondents increases with the size of businesses from 48 percent for businesses with 250 to 499 employees, to 70 percent for those with 1,000 to 5,000 employees. Responses related to three specific aspects relevant to migration showed:

  • end date set to February 2014: almost 80 percent of the businesses surveyed knew that the migration to needs to be completed by 2014 in the euro area. While more than 75 percent of UK businesses did not know the deadline to migrate, more than 85 percent of French and German businesses were aware of the 2014 deadline.
  • New bank details with Business Identifier Code (BIC) and International Bank Account Number (IBAN): 70 percent of the businesses surveyed knew that they will need to use new bank identifiers for direct debits and credit transfers in the first stage of . When the 'IBAN-only' rule (Article 5 (7) of the Regulation) comes into force, businesses may  only  take into account the IBAN.
  • New ISO20022 message format: almost half of businesses surveyed were aware of the need to implement a new message format for transactions.

The Steria report also found that at the time of the survey, 31 percent of businesses issuing direct debits had migrated or were in the process of migrating to SDD (42 percent in Germany, 35 percent in France, 3 percent in the UK). 30 percent of French and German businesses had not started to work on migration to at all. The SDD migration process was overall more advanced for larger businesses when including the assessment phase and the migration. Half of businesses with less than 1,000 employees had not even started to assess the impact of SDD. Among the participants in the Steria study, all French businesses issuing direct debits and a large majority of German businesses issuing direct debits (85 percent) stated that they will be compliant by 1 February 2014.

Also in December 2012, EuroFinance published the results of its survey, entitled: 'Countdown to - How ready are corporates for the February 2014 compliance deadline?' (see 'related links' below). A total of 273 finance and treasury professionals responded to the five questions asked within the survey, which was sent out on 27 November 2012. With regards to the question 'What is the current status of your company's project?', respondents based in indicated the following:

  • Not started: 12 percent.
  • Evaluating options / planning: 29 percent.
  • Planning, teams and budgets in place: 11 percent.
  • Project underway and behind schedule: 4 percent.
  • Project underway and on schedule: 18 percent.
  • Basic compliance achieved and no further action planned: 12 percent.
  • Basic compliance achieved and now seeking further efficiency: 15 percent.

The EuroFinance survey also found that 59 percent of corporates are targeting to achieve 'basic compliance' (no rejected payment instructions) and only 28 percent are currently using as a platform for creating efficiencies.

This data indicates significant progress has been achieved to create awareness among corporates on the legal obligation to comply with the core provisions of the Regulation by 1 February 2014 in the euro area. It has to be recognised however that 21 percent of corporate direct debit users surveyed by Steria in France, Germany and UK in 2012 had never heard of ; and 31 percent of respondents to the EuroFinance survey located in stated that they did not know exactly what will be required for their companies to be compliant. Efforts must therefore continue to engage late movers in the process and educate on how to adapt systems and operations in line with the Regulation.

Public sector readiness

In November 2012, the European Commission (the Commission) published the 6th survey on public administrations' (PA) preparedness and migration to (see 'related links' below). The report states: "PA migration to has accelerated since the last survey with the migration rate increasing from 24.9 percent in June 2011 to 34.8 percent in May 2012." The migration to by PA in a number of EU Members States in the euro area significantly increased during the reporting period, "the most notable ones being Austria (from 60 to 87 percent), Greece (from 0.01 to 65.4 percent) and Portugal (from 12.56 to 33.02 percent)." As regards preparedness of the public sector, the Commission also identified significant progress in Belgium, France and Germany. Luxembourg and Finland have achieved full migration. The Commission survey further finds: "SDD migration rates are mostly still at zero or only marginal. (...) It is, however, important to stress that direct debits are generally used by PA to a very limited extent or not at all."

In addition to the survey on PA preparedness and migration to , the Commission publishes separate annual progress reports on the state of migration as requested by the Economic and Financial Affairs Council (ECOFIN), which comprises the Finance Ministers. The Commission released its third annual progress report on the state of migration in May 2011. No further updates have been made available.

Percentage of banks in offering services

The launched the Scheme in January 2008. As of January 2013, 4,539 in 32 countries offer services. Today, the delivering services represent more than 95 percent of payment volumes in Europe. The Participant Register, which lists scheme participants, is publicly available at The absolute number of adhering to the Scheme has decreased slightly compared to previous reports due to merger and acquisition (M&A) activity.

Percentage of transactions compared to the total volume of credit transfers generated by customers

According to the indicators compiled by the European Central Bank (ECB), the share of transactions as a percentage of the total volume of credit transfers generated by bank customers, amounts to 30.6 percent as of November 2012. The ECB Indicators can be viewed at A figure of 100 percent would indicate that only services are used and have fully replaced non- instruments. The Indicators are based on aggregated data provided by clearing and settlement infrastructures in the euro area. This data avoids double counting by excluding, for example, transactions sent via links between infrastructures. The data also excludes 'on-us' transactions (SCTs between accounts at the same bank) as well as transactions cleared between banks bilaterally or via correspondent banking. The ECB Indicators also show market uptake by country.

Percentage of banks in offering SDD services

The launched the Scheme and the SDD Business to Business Direct Debit (B2B) Scheme on 2 November 2009. As of January 2013, 3,886 , representing more than 80 percent of payments volume have signed up to the Scheme. As of January 2013, 3,427 also adhere to the Scheme. The separate Participant Registers for the and Schemes list the participants taking part in these schemes. These registers are publicly available at All branches of banks in the euro area must be reachable for cross-border direct debits, e.g. the Scheme, since 1 November 2010 as mandated by Article 8 of Regulation (EC) No 924/2009 on cross-border payments in the Community. The absolute number of adhering to the SDD Schemes has decreased slightly compared to previous reports due to M&A activity.

Percentage of SDD transactions compared to the total volume generated by customers

According to the SDD indicators compiled by the ECB, as of November 2012 the share of transactions, as a percentage of the total volume of direct debits generated by bank customers, amounts to 2.1 percent. The ECB SDD Indicators can be viewed at The figures are based on aggregated data from clearing and settlement infrastructures located in the euro area. As such, SDD transactions, which are cleared bilaterally or processed within the same institution, are excluded from this indicator.

for cards

As reported in previous issues of the Newsletter, good progress has been achieved in the realisation of for cards. The 's Cards Framework (SCF) outlines high level principles and rules that when implemented by the card industry, will deliver a consistent user experience to both cardholders and merchants when making or accepting euro payments or cash withdrawals. The SCF recognises the EMV standard for -wide acceptance of card payments. EMV is an industry standard to implement chip and personal identification number (PIN) security for card transactions to combat fraud. An important indicator on the progress in this area is the number of cards, points of sale (POS) and automated teller machines (ATMs) in the market that use chip and PIN for the authorisation of a card payment. More specifically, the percentage of EMV-compliant cards, POS and ATMs in is monitored. Migration to EMV in Europe is essentially complete: at the end of 2011 (estimates), 87.2 percent of cards, 94.2 percent of POS and 96.7 percent of ATMs in were EMV-compliant. According to the ECB Indicators (, EMV transactions in the euro area (as a percentage of total transactions at POS terminals) reached 82.1 percent in June 2012 (latest data available).

Etienne Goosse is the Secretary General.


Related links:

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!

Steria Report: 'SEPA: Will European Businesses be Ready for the Transformation?'

EuroFinance Survey: 'Countdown to SEPA - How Ready are Corporates for the February 2014 Compliance Deadline?

European Commission 6th Survey on Public Administrations' Preparedness and Migration to SEPA Credit Transfers and Direct Debit (November 2012)


Related article in this issue:

Electrabel GDF Suez: "We Are Delighted to Offer Our Customers SEPA Direct Debit Services!". The biggest Belgian biller completes migration to SEPA Direct Debit (SDD) in December 2011 and boosts the national SDD migration rate to 19 percent in that month


Related articles in previous issues:

EPC Newsletter: Case Studies Highlighting Successful SEPA Migration Projects of Bank Customers

EPC Newsletter: Articles Published in the Section 'Focus: SEPA Migration'

EPC Newsletter: Articles Published in the Section 'Get Ready for SEPA. Act Now!'

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