The disturbing but frank opinion of European banking insiders involved in a decade-old political vision to create a Single European Payments Area (SEPA) is that it is a complete mess. At a time when an exit from the euro for some countries seems more and more probable, this long-standing ideal of a common payments market is fast approaching its deadline: the first for the eurozone is in February 2014, and another in late 2016 for all EU states, as well as Iceland, Liechtenstein, Norway, Switzerland and Monaco.
Progress in migration to date has been somewhat disappointing. Today, only 30% of credit transfers and a meagre 1% of direct debit transactions are SEPA compliant, although the schemes have been live for five and four years, respectively. Industry participants put this down to low or no demand for cross-border retail payments, and also lax self-governance. This prompted the European Commission (EC) earlier this year to set the deadline.
