Oct. 24 (Bloomberg) -- The European Central Bank said companies shouldn’t wait until the last minute to adapt to new payment-transfer standards entering into force in 100 days.
“Information compiled by the ECB and the euro-area national central banks show that many key stakeholders have decided to migrate only in the last quarter of 2013, or even later” to common technical standards in the Single Euro Payments Area, the ECB said in its second SEPA Migration Report released today. “This approach generates operational risks and limits the ability to tackle any issues or unexpected developments that might arise during the changeover period.”
SEPA enables customers to make euro transfers across borders within Europe using a single payment account and a single set of payment instruments. Thirty-three European countries are participating in the project initiated to promote a single market for bank transactions. Adherence to the new standard is mandatory from Feb. 1.
“Since our first migration report, we have been emphasizing the fact that both payments providers and users are responsible for being sufficiently prepared,” ECB Executive Board member Benoit Coeure said in the report. “And our message to them is still the same: don’t leave it to the last minute.”
The new legal requirements were put in place as an initiative to support the single market in Europe. Payment orders by companies that do not comply with the new rules once the deadline hits on Feb. 1 will not be allowed to be processed by payment-service providers.
“It is a legal requirement for all actors to be ready,” Coeure said on a conference call with journalists.
In Germany, Europe’s largest economy, less than 14 percent of all transfers and less than 1 percent of all direct debits followed SEPA standards in the third quarter, Bundesbank board member Carl-Ludwig Thiele said at a press conference in Frankfurt today.
“If companies aren’t able to adhere to SEPA by the legally prescribed deadline, they risk a liquidity squeeze and costs because of wrong or late settled payments,” Thiele said. “A true final spurt is needed in Germany.”
To contact the reporter on this story: Stefan Riecher in Frankfurt at firstname.lastname@example.org
To contact the editor responsible for this story: Craig Stirling at email@example.com