ECB demands ‘fast adoption’ of Sepa legislation

The European Central Bank (ECB) has called on European legislators to rule quickly on a proposed postponement of the migration deadline for the Single Euro Payments Area (Sepa) until August 1, 2014.

Payment service users and providers will, as it stands, have to migrate to new credit transfer (SCT) and direct debit (SDD) schemes by February 1. The European Commission proposed a six-month extension to the deadline last week, believing that market participants will miss the existing deadline.

The ECB issued a swift rebuttal, insisting that the existing deadline stood and in its official opinion, released last week, argues that "the proposed regulation has given rise to confusion in the markets on the deadline for migration".

The uncertainty stems from the period of limbo that will arise between February 1 and the date at which the extension is adopted by the European Parliament and Council of the European Union – likely February 3.

The ECB says this situation should "as far as possible be avoided" and calls for the European authorities to adopt the proposal and, in doing so, provide the markets with "clear guidance about the deadline".

Since the proposal was made, migration rates have increased exponentially across both schemes – as predicted by the ECB in its second migration report, released in October.

In December 74% of all credit transfers and 41% of all direct debits were compliant with Sepa standards. Only 64% and 26% respectively were compliant in November, and just 60% and 12% in October. These statistics demonstrate that migration has not only increased but gained pace in the past few months.

This has led many of the national central banks in the eurozone to express confidence in market participants' ability to meet the initial deadline. The National Bank of Slovakia is the latest to insist that migration "will be completed" by February 1.

Even in Estonia – where the credit transfer migration rate was just 2% in December – the central bank issued a statement saying that SEPA conditions would "start to apply… as planned" and that "the Commission's proposal will not make any change to the timetable already in place."

The Bank of Portugal, in contrast, acknowledges the extension and simply states that "payment service providers and users must continue their efforts to migrate" to Sepa. Migration to the SCT improved to 80% in December in Portugal, but only to 8% for the SDD.