Towards the end of the SEPA end-date debate?

Abstract

The slow uptake of the Single Euro Payments Area (SEPA) instruments by public administrations, corporates and consumers has intensified the discussion on how to move forward with SEPA. Until now, the banking industry has taken most of the costs of SEPA compliance, mainly by offering the standard SEPA schemes. Banks and other Payment Service Providers still have to operate parallel infrastructures for both legacy and SEPA payments; this is inefficient and costly. It is not surprising that the European Payment Council (EPC), representing the banking sector, is pressing European regulatory authorities to come up with a formal end-date, to accelerate SEPA migration by all stakeholders. Without strong demand by public administrations, corporates and consumers, achieving SEPA through self-regulation is expected to remain very problematic. Further delaying its implementation could even put the whole SEPA project in jeopardy or cause SEPA to fall apart. In the meantime, the debate on a possible end-date for SEPA migration in Europe has intensified. The findings of the European Commission Public Consultation on the end-date question which was issued in 2009 have shown a large majority in favour of such a deadline. The discussion on mandatory end-dates entered a new stage after the Commission issued a Working Paper, ‘SEPA Migration End-Date’, on 2nd June, 2010, in which it introduced the so-called ‘essential requirements’ approach. This has led to intens­ive discussions among the various stakeholders. More clarifications are expected in the coming months. This paper goes in more detail into the reasoning of SEPA for the various stakeholders, and the role that an end-date might play in realising the benefits for all SEPA users. Special focus is on the need to put SEPA in motion.