SCT/SDD Migration: 1 February 2014 single End-Date
- As announced before Christmas, the European Union has just released the criteria to migrate to Euro credit transfers and direct debits. After the EU Parliament on 14 February, the EU Council has adopted on 28 February the “end-date” Regulation proposed one year ago by the Commission. This binding text sets a unique end-date for SEPA payments on 1 February 2014 at the latest (with the exception of SCF cards).
- Credit transfers and direct debits in Euros now have less than two years to comply with the “technical requirements” copied –yet without quoting them– from the EPC Rulebooks. Country-specific niche payments, derived from one of these two core instruments (i.e.: accounting at most for 10% of the related national volumes) benefit from an extended two-year period. Lastly, Euro payments in non-Euro countries with have to have migrated by 31 October 2016.
- As said, on 1 November 2012, no interchange fee will be allowed on cross-border direct debits, and, as of 1 February 2017, for all national ones as well. Also, the BIC of a payer's bank shall only be communicated until 1 February 2014 for national payments but “only where necessary”. However, a country can choose to postpone this until 1 February 2016, when BIC will also no more be demanded for cross-border payments either.
- Finally, debtors’ basic protection is enhanced. They may request their bank to filter their direct debits by date and/or amount, and to block or authorise specified creditors or a given direct debit mandate (black/ white lists).
See December 2010 Insight
- The EU legislator has responded to consumer associations’ concern with the increased protection of debtor accounts against (cross-border) direct debit fraud –at no additional charges. Moreover, banks will have to give up interchange revenues (staged decreases are forsaken), and to provide themselves the BIC for the counterpart bank. Customers’ lobbying –especially corporate–, has been effective.
- On another stance, since the PSD is to be reviewed by the end of the year, the Commission plans to extend the eight-week refund right on authorised payments. Aligning on existing direct debits’ national practices, the period for customer claims would be unlimited.
- Two year will be short to migrate to SDD, which has just reached 0.5% of the volume in the Euro zone, one year and a half after its roll-out. Pushed by the French public sector’s migration, the SCT, for its part, accounts for almost one fourth of all transfers in Euros (23.7% on 1 January 2012). Co-operation between banks and customers –mainly corporates– will be critical to smooth the migration and avoid delays.