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Now that the European Parliament has passed the SEPA Migration End Date Regulation, requiring the completion of the Single Euro Payments Area by February 2014, there is a lot of confusion about the scope and timing of the migration to SEPA, and how harmonized the environment will be from 2014.

To resolve the confusion, the IBOS Association banking group has now completed a full analysis of the IBOS SEPA Information Exchange, attached here. It contains a large amount of information about the SEPA Migration in 18 countries – all the main Euro-In countries as well as several Euro-Out ones.

On timing, it shows the key dates especially in relation to where countries have made use of the Transitional Provisions allowed in the SEPA Migration End Date Regulation, for example where BIC as well as IBAN can be requested up until 2016.

On harmonization, it shows countries’ plans to define Additional Optional Services, which would have the effect of preserving country-specific features of the national credit transfer and direct debit schemes, where they differ from the SEPA Schemes.

The headline is that countries are aiming for a high degree of harmonization of the core credit transfers and direct debits with few examples of Additional Optional Services.

But a number of payment types have been defined as “niche” – meaning they will not be migrated until latest 2016 – or out-of-scope of SEPA, in order not to complicate the national migration and make it unmanageable in the timeframe.

In other words the environment will neither be:

  • Maxi-SEPA = only the SEPA Schemes exist at all and there is complete harmonization of their usage; nor
  • Mini-SEPA = each country has its own version of the SEPA Schemes due to extensive definition of Additional Optional Services to preserve country-specific features
It looks like a Midi-SEPA: near-complete harmonization of usage of the SEPA Schemes for the core credit transfers and direct debits, but surrounded by numerous country-specific data formats, eBanking services and banking products, and of the range of out-of-SEPA-scope payment products: cash, cheque, wire transfers, remittances and cards.Not quite the completion of the harmonized Payments environment that the European Commission has been requesting.The even bigger concern for the industry right now is whether anything close to Midi-SEPA will be achieved by 2014, or even 2016.Will the migration percentage of the core credit transfers and direct debits to the harmonized environment be anywhere near 100% by February 2014? The latest figures show only about 35% of eligible credit transfers are being done through the SEPA Schemes now, and 2% of eligible direct debits. The minimum target is 90% of credit transfers and direct debits by February 2014, and reaching 100% by February 2016, the difference being the “niche” services whose migration can be delayed until 2016 but whose volume cannot be more than 10% of the whole.It is clear from current migration percentages achieved that the minimum target of 90% of credit transfers and direct debits by February 2014 will not be achieved.  This means that one of the three things will happen:
  • Legacy clearing’s stay open for as long as it takes
  • Legacy clearing’s shut as per EU requirements and users shift to different payment methods like cards or mobile
  • Legacy systems shut…and payments are not made


Published in Business Money, July 2013 – “Payment harmony? Not quite”