Peter Vance, head of payments at AIB, says he was not surprised at the development. “Across Europe, the migration stats were not at the level you would expect. The main issue is on the direct debit side. The European Commission are trying to de-risk the process across Europe.”
He says larger countries such as Germany, France and Spain are experiencing the biggest migration challenges due to the volume of transactions processed and the number of customers and vendors that banks have to coordinate. Despite the European Commission’s insistence that the deadline will not be extended beyond August, Vance says there may be scope to do so. “It is volume dependent. If, for example, the Germans are still struggling to get payments across then I wouldn’t say [another extension] is unlikely.”
John Rice, head of SEPA delivery at the Central Bank of Ireland, doubts the transition period will be lengthened. “I think the EU are making it clear that there won’t be any further extension.”
In Ireland, migration is progressing well, with 95 per cent of payments expected to be SEPA compliant by the original February 1st deadline. As a result, the Irish Payment Services Organisation (IPSO) and its member banks have chosen to extend the migration date by just two months, to March 31st.
“A lot of switchovers are happening in January. Before the European Commission announcement we expected to have 95 per cent of companies ready by February 1st.”
Some companies have taken a last-minute approach to SEPA, and there is broad agreement that the European Commission’s proposal is a prudent measure to reduce the risks around this “big bang” transition. “Some SMEs underestimated how complicated SEPA was and came to the party late,” says Brian Hanrahan, executive vice-president at Sentenial. “That received some sympathy this time around but won’t again.”He says the transition period will help to mitigate the bedding-in issues that companies are experiencing with SEPA. “We’re seeing now that even those people who did become compliant didn’t necessarily consider what SEPA is like to live with. Every week, every day, companies run payments.”
Vance agrees. “Adoption of SEPA in each individual country has been slightly different, which is creating issues. There is a standard rule book, but there are nuances in interpretation. SEPA is currently an immature system and it needs to be ironed out.”