Euro electronic payments will fail unless SEPA deadline is extended, warns European Commission

Loek Essers

While the adoption pace has been picking up in Germany since the third quarter of last year, only 32 percent of all credit transfers there were SEPA Credit Transfers, said Carl-Ludwig Thiele, executive board member of the Deutsche Bundesbank responsible forpayment systems, in a Dec. 19 report on the country's SEPA migration.

On a typical working day Germany handles about 25 million credit transfers worth about €227 billion (about US$309 billion), Thiele said. Germany still needs to convert 17 million credit transfers per day, he said at the time.

Germany's adoption of SEPA Direct Debits was even lower and had reached 10 percent in November, Thiele said, adding that it is evident that many SMEs and small organizations still have to make the switch. On a typical working day Germany handles about 35 million direct debits worth about €52 billion, Thiele said, adding that this corresponds to a market share in the euro area of 47 percent.

While the proposal of the European Commission to extend the migration period buys the Germans some time, it should not lead to uncertainty about migration preparations, Thiele said in a news release published on Thursday in response to the Commission's plans.

"I appeal to all market participants to consistently continue their SEPA projects and to maintain a conversion on Feb. 1," he said, adding that while the Bundesbank is "confident" the goal can still be achieved by Feb. 1, in Germany, much remains to be done.

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