For months, media fretted that companies would not be prepared to comply with the Single Euro Payments Area (SEPA) by the February 1, 2014, deadline—and many analysts predicted that the European Commission (EC) would delay the deadline. Today, less than a month before SEPA formally takes effect, unprepared companies have been granted a reprieve. Although the EC has not officially changed its compliance deadline, it is proposing a transition period of six additional months during which credit transfers and direct debits that are not SEPA compliant will still be acceptable for payments within the Eurozone.
Said Michel Barnier, internal market and services commissioner for the EC: "As of today, migration rates for credit transfers and direct debits are not high enough to ensure a smooth transition to SEPA despite the important work already carried out by all involved. Therefore, I am proposing an additional transition period of six months for those payment services users who are yet to migrate. In practice this means the deadline for migration remains 1 February 2014, but payments that differ from a SEPA format could continue to be accepted until 1 August 2014. I regret having to do this, but it is a measure of prudence to counter the possible risk of disruption to payments and potential consequences for individual consumers and SMEs [small to midsize enterprises] in particular."