EPC Chair Gerard Hartsink: A regulatory intervention by the EC "would effectively derail the entire SEPA project"

1 November 2010 marks an important target date on the route to SEPA as starting 1 November all banks in the euro area are reachable for cross-border SEPA direct debits as mandated by European Union (EU) law.

According to the EPC, a clear deadline for the transition to the SEPA payment schemes is now required to achieve an integrated euro payments market. The EPC has thus called on EU lawmakers to set an end date for migration to SCT and SDD through EU Regulation. In a press release, the EPC has expressed the belief that a possible forthcoming regulatory intervention relating to SEPA, as outlined by the European Commission earlier in 2010, would derail the entire SEPA project. As such it would eliminate the extensive benefits SEPA would offer bank customers.

EPC Chair Gerard Hartsink comments: “The scene is set to bring SEPA to its successful conclusion. It is now up to EU lawmakers to provide planning security to all market participants by setting a clear deadline for migration to the SEPA Schemes.”

Earlier in 2010, the European Commission has announced that it was considering the introduction of a formal proposal for a Regulation establishing end dates for euro credit transfer schemes and euro direct debit schemes to comply with so-called “essential requirements”. In the same press release, the EPC has indicated that while it welcomes the European Commission’s willingness to legislate on end dates for migration to SEPA, there are nevertheless several significant concerns regarding the possible forthcoming Regulation.

Gerard Hartsink has concluded: “In line with expectations expressed by the EU Finance Ministers, the European Parliament and the European Central Bank, the forthcoming Regulation must set end dates for the phasing out of existing national euro credit transfer and euro direct debit schemes to ensure that the high costs of running multiple payment schemes in parallel can be eliminated. A regulatory intervention based on the European Commission’s considerations published in March and June 2010, would effectively derail the entire SEPA project and eliminate the extensive benefits SEPA offers bank customers. The EPC welcomes the recent announcement by the Commission that a public hearing will be held in November 2010 to ensure that all market participants are consulted on the most appropriate approach to a regulatory intervention related to SEPA”.

In its 7th Progress Report on the Single Euro Payments Area (SEPA) made public on 22 October 2010, the European Central Bank (ECB) calls on European legislators to step up their game and take further actions in order to ensure that SEPA be completed successfully. Entitled “Beyond theory into practice”, the report outlines the main areas where SEPA continues to face major adoption challenges