Extended SEPA deadline may keep German electronic payment system running

Tuesday 21 January 2014 09:47 CET | News

The six-month deadline extension for SEPA adoption could allow Germany’s electronics payment system keep running, recent findings from German Central Bank indicate.

According to the source, the switch to SEPA payments is progressing slowly in Germany. In November 2013, around 32% of credit transfers were SEPA Credit Transfers, but that has risen to over 45% in December 2013. If adoption continues to grow at that rate, Germany should be able to hit the SEPA target for credit transfers within the six-month extension.

The switch to SEPA Direct Debits has been much slower though. About 18% of Germany’s direct debits were SEPA-compliant in December 2013. While this is an increase compared to November 2013 when the adoption rate was just above 10%, it is still low.

According to Carl-Ludwig Thiele, executive board member of the Deutsche Bundesbank responsible for payment systems, the switch to SEPA should have the highest priority for all participants. A six-month extension should be no cause for participants to postpone their projects.

The European Commission has proposed an extra transition period of six months during which payments outside the Single Euro Payments Area (SEPA) format will still be accepted.

The extended deadline came after lower migration rates than anticipated and will run until August 2014. The Commission has stated that the proposal does not change the formal deadline for migration of 1 February 2014.

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Keywords: SEPA, Germany, electronic payments
Categories: Payments & Commerce
Countries: World
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