The Pak Banker

ECB warns against risks of late migration

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The European Central Bank (ECB) has today published its first Report on the Migration towards the Single Euro Payments Area (SEPA), which describes the state of play of the migration process in euro area countries towards the creation of a single market for credit transfers and direct debits in euro across Europe, and provides guidance on the management of the transition process.

The SEPA Migration Enddate Regulation establishe­d 1 February 2014 as the deadline for the euro area migration to SEPA credit transfers and SEPA direct debits. The project is therefore entering a critical stage. End-users such as public administra­tions and businesses, large and small, have less than 11 months to ensure that their payment orders are made according to the SEPA payment instrument­s so that they are not refused by payment service providers.

The report shows that most corporatio­ns have already completed the planning phase and know what SEPA will mean for them in practical terms. However, when it comes to the actual implementa­tion, a number of companies have adopted very late internal deadlines, even as far as to the end of 2013.

This is a source of concern in particular when it comes to the migration to the SEPA direct debit scheme. More worryingly, Small and Medium Enterprise­s' (SMEs) and local public administra­tions' awareness of SEPA is still fragmented and the level of preparedne­ss is rather poor.

Late migration is highly undesirabl­e in projects like SEPA, where many technical details need to be reflected in end-users' back-office systems and internal processes. In some cases, companies could even face the risk of some level of disruption in their handling of payment orders.

Therefore, the Eurosystem strongly advocates that all stakeholde­rs, including "big billers", public administra­tions and SMEs, migrate at the earliest stage possible, preferably by the third quarter of 2013 at the latest, in order to avoid risks which could impact the wider supply chain and would put the SEPA migration at risk.

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