European payment authorities are celebrating a much overdue “holiday” today as Aug. 1 marks the deadline day for the industry within the Eurozone (countries outside the euro area have until Oct. 31, 2016 to migrate) to have completed the migration to fully compliant credit transfers and direct debit transactions.
By creating the Single European Payments Area (SEPA), authorities hope that SEPA will give a significant economic boost to Europe, enabling businesses to expand into new markets without extra payment costs as billions of payments increasingly cross national borders.
“The successful completion of SEPA further accelerates Europe’s financial integration. It removes barriers to credit transfers and direct debits which will no longer impede businesses or consumers,” said Yves Mersch, executive board member at the European Central Bank.
Originally, the deadline had been set six months prior to August, but reports emerged that the majority of smaller organizations would not be able to meet the deadline. As a result, authorities pushed the deadline back. In fact, the Mercator Advisory Group covered this issue in a January 2014 Research Viewpoint, The SEPA Migration: When Will It Be Over? In the months since, smaller organizations have made significant strides to meet the deadline, suggesting that there will be little interruption to the flow of payments.
However, the migration to SEPA compliant credit transfers and direct debit transaction is just the first step in the larger scheme of things with the European Central Bank turning its attention to payment cards and also setting up a Euro Retail Payments Board (ERPB) to explore regulating mobile and other ‘innovative’ payments methods.
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