The European Central Bank (ECB) and the German Bundesbank are urging not to procrastinate in the process of switchover towards Sepa. Sepa – the Single European Payments Area – is to be launched by February 2014 at the latest but firms keep on postponing the implementation of its parts. Most companies have allegedly announced to put off the changeover until the last quarter of 2013. The delay in the implementation raise worries as companies might not deal with unexpected problems that might occur. Benoît Cœuré, member of the executive board of the ECB, commented: “I have said this before and will repeat it: everybody has to be ready on 1 February 2014 or risk disruptions in their individual handling of payment orders.”
By February 2014, both Sepa credit transfer (SCT) and Sepa direct debit (SDD) schemes must be migrated as required by the EU law. Yet, according to the Bundesbank, Sepa transfers during the third quarter of 2013 accounted only for 14% of all transfers while Sepa direct debits amounted only 0.68%. The numbers are alarming realizing that Germany must convert about 25 million working-day transfers valued at €227 billion and around 35 million direct debits valued at €52 billion.
Enterprises, municipalities, public bodies and non-profits will be touched by the change the most. All of them must comply with the Sepa migration. “If a business is not Sepa-competent by the legally established migration deadline, liquidity bottlenecks and costs are likely to be caused by payments which are incorrect or processed late,” warns Carl-Ludwig Thiele, a member of the Bundesbank’s executive board.
For most citizens of EU countries, however, very little will change. The account information – account number and bank sorting number – will be replaced by an international account number (IBAN). Private standing orders, like those for rent, telephone bills, gas or electricity will be altered automatically. Privately issued direct debits will also be automatically adjusted.
