Progress in the creation of the Single Euro Payments Area continues, but the banking industry still will not meet the voluntary December 2010 deadline for SEPA credit transfers and direct debits, contends the European Central Bank, which now is encouraging European legislators to set a mandatory timeline.
SEPA is an initiative the European banking industry launched in 2002 to link European Union and other euro-based countries’ separate national payment systems into a standardized system.
The European Payments Council, which is responsible for the initiative, is no stranger to hearing doubts that the industry will reach its goals for completing a SEPA migration (
In its most recent progress report on SEPA, the European Central Bank is recommending that European legislators set a December 2012 deadline for having to support SEPA credit transfers and a December 2013 deadline for SEPA direct debits.
Throughout Europe, 32 countries participate in SEPA. More than 4,400 banks are participating in SEPA’s credit-transfer program, and 3,000 are signed up for SEPA’s direct-debit program, according to the European Central Bank.
Most recently, Germany-based Deutsche Bundesbank and European payment processor Equens SE announced a partnership to begin processing SEPA credit transfers next month.
Despite many banks moving toward SEPA adoption, SEPA direct debits represent well less than 1% of all direct debits processed in the euro region, while only 9.3% of all credit transfers were SEPA-compliant at the end of August, the European Central Bank noted in the report.
Because SEPA is progressing from the design-and-implementation phase to the migration phase, a mandatory timeline is needed to “ensure that the necessary adoption really takes place,” Gertrude Tumpel-Gugerell, executive board member of the European Central Bank, said in a recent news release about the bank’s report.
Additionally, SEPA still faces challenges and should address such other payment methods as online and mobile payments, the creation of a common European debit card system, and the eventual phasing out of magnetic stripes on cards before completely migrating to SEPA, the European Central bank contends.
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