EC Sets Deadline for SEPA Credit Transfer and Direct Debit

by Mercator Advisory Group 0

Frustrated by the lack of progress in the SEPA process, the European Parliament and Council have agreed to set Feb 2014 as the deadline for the completion of migration towards SEPA credit transfer and direct debit.

The EC has long accepted the need to enforce migration deadlines from national credit transfers and direct debits to Sepa (Single Euro Payments Area) instruments, conceding self-regulation has failed to bring the move about quickly enough.

However, despite 2014 representing a significant delay to the initial targets for migration, it could still prove ambitious. At the Sibos banking conference in September, a straw poll of delegates conducted during a panel session found the naysayers on the floor held a slim majority over the optimists when asked whether 2014 could be met.

Mercator’s report European Card Market 2011 Update (published in July 2011) covers the topic in depth.

“The latest data suggests that the adoption of SEPA Credit Transfer (the transfer of money from one account to another account) represented only 15.65 % of all credit transfer transactions in Europe in February 2011, a full three years after SCT became available. The migration towards SEPA Direct Debit (direct debit: an instruction from an account holder to their financial institution authorizing an organization to collect varying financial amounts from their account) has been even slower. As of February 2011, only 0.9 % of all direct debit transactions were SEPA-compliant 16 months after the SDD went alive, compared to the 3.9 % penetration rate of SCT at the corresponding point.”

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