Experian Payments comment on the migration to the Single Euro Payments Area

18 May 2009

“The recent announcement from the French National SEPA Committee that the country will implement the SEPA Direct Debit (SDD) scheme one year after the official deadline of November this year really comes as no surprise. Back in November last year, the French banks highlighted confusion over tariffs as a reason for suspending the launch of the new pan-European payment services, so the scene was already set.

While the French banks are the first to publicly state a non-compliance with SEPA Direct Debits by the common deadline of November 2009, it’s clear to all involved in the migration to a pan-European direct debit that it has not been a smooth path to tread. The confusion over interchange fees for Direct Debits, and cards, coupled with the absence of an end-date for legacy payments systems has meant that many banks have lost interest and indeed a sense of urgency to meet the looming SEPA deadlines. Furthermore, a general antipathy towards SEPA has set in, fuelled by more pressing concerns such as the credit crunch. Indeed, Sweden has recently delayed transposing into national law the Payments Services Directive (PSD) - the legal framework for SEPA. It is only by all contributors pulling together that we shall realise the benefits of the SEPA schemes and the longer we struggle, the more painful it will be for all concerned.

Yet whilst these developments clearly represent a setback for the progression of the European payments framework, I don’t believe that the announcement from the French National SEPA Committee will open the floodgates for others to follow suit. Why? Because ultimately, SEPA will create tangible opportunities for both banks and their corporate customers. For example, SEPA creates opportunities for corporates to become more efficient and consolidate their systems and processes by rationalising the number of bank accounts they hold. This more standardised approach to euro payments will potentially allow them to grow their international customer base without adding extra, national complications.

Despite the benefits, it is clear that certain obstacles still need to be overcome. National legacy systems remain an obvious barrier to SEPA take-up, as many organisations, for example, will not be able to handle the conversion from the domestic Basic Bank Account Numbers (BBANs) they currently hold on their payment database to the IBAN and BIC format required under SEPA, without which rejected payments and knock-on penalties could result.

Yet, such obstacles can and must be overcome so that the industry can reap the fruits of its labour vis-à-vis the money, effort and time already invested in the SEPA programme. I believe that, despite the current economic uncertainty, banks and the industry need to remain focussed on the end-goal of SEPA and recognise the ultimate benefits and opportunities that a single euro payments area will create for the entire banking and business communities.”


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