Towards the end of 2013, with the 1st February 2014 SEPA migration deadline looming, the European Commission realized that not all participants would be SEPA compliant by the original deadline. It was originally thought that the deadline would allow payment service users and banks ample time to adjust to SEPA’s technical requirements. However, in December 2013 it was revealed that only 73.78% of credit transfers and 41% of Direct Debits complied with SEPA standards, and so it was decided to extend the deadline, giving participants a 6 month ‘grace period’
The Single Euro Payments Area Migration Date Extended
Detailed Information about SEPA (Single Euro Payments Area) migration date extension. Why your business needs to be SEPA ready?
SEPA Migration Date Extended to August 2014
Sticking to Their Guns
The European Commission remain adamant that they are still sticking to their ‘formal’ migration deadline, but that they are now giving businesses an additional 6 months to ensure their systems are ready for SEPA (Single Euro Payments Area) Debit and Credit transfers.
Michel Barnier, Internal Market and Services Commissioner, commented, “In practice this means the deadline for migration remains 1 February 2014 but payments that differ from a SEPA format could continue to be accepted until 1 August 2014. I regret having to do this, but it is a measure of prudence to counter the possible risk of disruption to payments and potential consequences for individual consumers and SMEs in particular.”
Between countries, dates for migration deadlines for SEPA Direct Debits (SDD) and SEPA Credit Transfers (SCT) may vary, as some countries are imposing their own, earlier deadlines. You can find out more information on country-specific deadlines here.
The Importance of Being SEPA Ready
So why should you ensure you are ready for SEPA? Whilst 6 months sounds like a long time, the 1st August is right around the corner, and after that date, all credit transfers and direct debits that are not SEPA compliant will be rejected. Existing national methods of payment will be replaced by SEPA Direct Debit and SEPA Credit Transfer.
If your company is not SEPA ready in time, you may find you’re unable to collect money from Eurozone customers. The Single Euro Payments Area (SEPA) will help businesses to lower their transaction fees and streamline their accounts, so if you’re not ready for SEPA, you could find yourself struggling to pay creditors on time or experience delays receiving payments from your customers.