The European Council recently approved an agreement with the European Parliament on the proposed draft SEPA Migration Regulation relating to credit transfers and direct debits.
Following increasing evidence that many European businesses were struggling to meet the 1 February 2014 deadline, it comes as no surprise that the European Commission has extended the deadline for compliance by 6 months.
The European Parliament is expected to vote accordingly in its plenary session in February and the Council will then formally approve the legislation without further discussion. The proposed regulation should enter into force as a matter of urgency and apply, with retrospective effect, from 31 January 2014.
What this means for you
The Commission was concerned that migration rates towards SEPA credit transfers and SEPA direct debits were not high enough to ensure a smooth transition and this additional 6 months will allow banks and other payment service providers to continue the processing of non-compliant payments through their currently existing legacy payments schemes, alongside Sepa credit transfers and SEPA direct debits, until 1 August 2014.
The introduction of this period is considered as an exceptional measure by the Commission which will not be extended any further, so the message is very much that this is the ‘last chance saloon’.