EU Extends New Bank Payment System Deadline By 6 Months

The European Commission on Thursday extended a deadline for the introduction of a new faster and cheaper intra-bank payments system by six months following delays in some EU member states.

Euro notes and coins are used to pay a restaurant bill in Lille, France, on November 10, 2012Euro notes and coins are used to pay a restaurant bill in Lille, France, on November 10, 2012

Euro notes and coins are used to pay a restaurant bill in Lille, France, on November 10, 2012Euro notes and coins are used to pay a restaurant bill in Lille, France, on November 10, 2012

The Single Euro Payments Area is meant to speed up payments and so reduce business and consumer costs by ensuring standard conditions, rights and obligations across Europe.

SEPA will still formally come into being on February 1 but payments made in other formats will continue to be accepted for another six months.

“I regret having to do this but it is a measure of prudence to counter the possible risk of disruption to payments,” EU Internal Markets Commissioner Michel Barnier said in a statement.

“I have warned many times that migration was happening too slowly and call once more on member states to … accelerate and intensify efforts to migrate to SEPA,” Barnier said.

“The transition period will not be extended after 1 August,” he added.

The Commission said that by November, SEPA Credit Transfers were about 64 percent compliant and SEPA Direct Debits only 26 percent, meaning the February 1 deadline was “now highly unlikely” to be met.

The European Central Bank, the guardian of the eurozone, insisted that within the single currency bloc great progress had been made and urged all involved to complete the switch as quickly as possible.

“Strong and successful migration efforts have been carried out … in the euro area,” the ECB said in a statement, adding that the most recent information pointed to an acceleration.

“The vast majority of stakeholders will complete their migration on time,” it said.

Stressing that the February 1 dealine remains in place, the ECB urged all “participants to complete the transition of all credit transfer and direct debit transactions to the SEPA standards by this date.”

SEPA will cover the 28 EU member states plus Iceland, Liechtenstein, Monaco, Norway and Switzerland when fully operational.

– AFP