In an announcement following the publication of the latest SEPA (Single Euro Payments Area) progress report, the ECB (European Central Bank) warned that companies in many corners of Europe are waiting too long to migrate to the new standards too and face serious consequences if they fail to hit the February 2014 deadline.
The ECB states in the latest report that while many large corporations are preparing internally for the SEPA migration, they are waiting until the end of the year to implement full conversion. This practice is a serious “source of concern” for the bank, particularly with direct debits. The ECB is imploring big billers, public administrations and SMEs to migrate by the third quarter of 2013 to avoid payment order handling disruptions The bank is aware of the many technical details involved in the migration that results in a high-time cost.
“Adapting to SEPA involves adjusting a lot of technical and business procedures over a limited period of time. Projects of this kind should not be left to the last moment. I hope that all stakeholders will take migration to SEPA Payment instruments as a top priority,” says Benoît Cœuré, member of the executive board at the ECB.
While encouraging larger companies to migrate earlier than required is already an uphill struggle, the report finds that smaller corporations and local public administrations know little to nothing about next year’s deadline, making full migration by 2014 only a remote likelihood.
While SEPA may have ambitious goals, the current migration timeline is increasingly out of touch with small and medium size merchants. Although large corporations have the available capital to enact SEPA, the ongoing economic distress in Eurozone countries like Greece, Italy, and Spain will make migration for small merchants suffering from poor consumer demand extremely difficult. Potentially extending the migration period for these types of merchants may be the best solution.