The European Commission has issued a six-month grace period with regard to the upcoming Single Euro Payments Area system, beyond the Feb 1 deadline.
While it technically remains in place, the update means firms not in full compliance by the start of next month won’t suffer from their payments systems being automatically shut down and leaving them unable to pay staff or suppliers.
SEPA is being introduced by the commission to improve domestic and cross-border payment efficiency within the EU. Until a few days ago, non-compliant firms were facing a countdown to their credit transfers and direct debt facilities ceasing to function.
“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,” said Michel Barnier, the internal market and services commissioner.
“Cross-border payments are no longer exceptional events which is why an efficient cross-border regime is needed.”
He noted that migration rates for credit transfers and direct debits are not yet high enough to ensure a smooth transition to SEPA by the beginning of next month. He stressed that while existing payment systems will be accepted for another six months, the start of February remains the preferred migration deadline.
“I have warned, many times, that migration was happening too slowly and call once more on member states to fully assume their responsibilities and accelerate and intensify efforts to migrate to SEPA so that all can enjoy its benefits. The transition period will not be extended after August,” he added.
A recent survey by ISME showed that only 22% of small firms in Ireland were SEPA-compliant in the run-up to the end of 2013.