Europe is one big step closer to payments integration with the announcement that the deadline for migration to the Single Euro Payments Area (SEPA) has been set for Feb. 1, 2014, a deadline ratified in February by the European Parliament. Aside from the headline 2014 date, existing niche schemes which represent less than 10% of credit transfer or direct debit payment volumes in a particular country have until 2016 to migrate to the SEPA credit transfer (SCT) and SEPA direct debit (SDD) schemes.
Reactions to the SEPA end-date have largely been positive. It is widely acknowledged that a deadline is essential if full migration to SEPA is ever to occur, given the pace of uptake so far. As of December, SCTs represented 23.7% of all credit transfers within the eurozone, while SDDs made up a mere 0.5% of all direct debits, according to data from the European Central Bank (ECB).
Wandhöfer says that in light of the requirement to move to ISO 20022 XML, multinational corporations should consider whether they can benefit from adopting XML on a global scale, rather than simply migrating to it in Europe. However, even for those with the budget to make such an investment, the move would still be a major undertaking.
“If a larger corporation decides to move to XML, it may decide to do so for all its transactions, not only SEPA,” says Wandhöfer. “This would clearly be a strategic project and it would hardly make sense to execute this based on changes happening in Europe alone. If they decide against such a global project, which may still be the case for many, they will be asking, ‘Why do we need to do this for Europe when it is in our view the banking sector’s responsibility to support us in SEPA?’”