“….should the proposal still be in process of adoption on 1 February 2014….”Fine. But how should a bank compliance officer react in that instance? A small poll, but so far, the belief amongst those I have spoken to is they have to work on the assumption that Feb 1st is the deadline, not August 1st. For example, does it require every authority to agree to the proposal or is it on a country by country basis? How long will that process take? By the time there is absolute clarity, the 2nd deadline is likely to have passed! Furthermore initial indications suggest that some countries, because of the progress to date, may decide to press ahead with the original deadline. Whilst admirable on one level, equally it does potentially cause complications by creating a multi-deadline deadline! It’s early days as to the actual impact. For most, this announcement came out of the blue. But, just as the boy who cried wolf was eventually ignored, the regulator who cried “No plan B!” may find that they have now created a series of problems for themselves.
The end date for the application of the Payment Service Directive (PSD) just expired on November 2nd. The transposition of PSD into country legislation was presented as the last hurdle before the full deployment of SEPA Direct Debit (SDD).
The European Payments Council (EPC) keeps on confirming a successful kick-off, where to-date 2,607 banks, representing about 70 per cent of SEPA payment volumes, have signed up to the new schemes of the SDD services.
There are no evident signs of significant uptake by banks, least by corporates.
What we perceive from banks, in reality, is an investment strategy focused on applying new direct debit schemes at local level, with a country-by-country piecemeal approach.
This is why I think we should refer to an ‘sDD’ implementation.
A small ‘s’, because in reality the spirit of SEPA is being betrayed, and a big ‘DD’, because each bank is looking at its own backyard and developing ad-hoc DD schemes.
Bottom line for banks
Get involved with corporate representative bodies (e.g., EACT- European Association of Corporate Treasurers) to guide your investment strategy and select key countries.
Bottom line for corporates
Get your banks explain in practical terms how they intend to deploy their SDD (i.e., ‘Big S’) services.
Question to the reader
Is this an area that requires further investigation?
Read Celent’s existing research reports.