Thursday 9th January, 2014

The European Commission has proposed an extra transition period of six months during which payments outside the Single Euro Payments Area (SEPA) format will still be accepted. The extended deadline came after lower migration rates than anticipated and will run until 1st August this year. The Commission stated that the proposal does not change the formal deadline for migration of 1 February 2014.

Internal Market and Services Commissioner Michel Barnier said: "An efficient Single Market needs an efficient SEPA. The entire payments chain - consumers, banks, and businesses - will benefit from SEPA and its cheaper and faster payments. Cross-border payments are no longer exceptional events which is why an efficient cross-border regime is needed.

"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 6 months for those payment services users who are yet to migrate."

He added: "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 in particular."

The SEPA is where more than 500 million citizens, over 20 million businesses and European public authorities can make and receive payments in euro under the same basic conditions, rights and obligations, regardless of their location.