SEPA Payments Will Fail on 1st May If You Ignore This

SEPA Payments for value 1st May will be delayed or worse still fail altogether – You’re probably thinking that’s quite a bold statement to make. Let me explain why in this question and answer post….

SEPA Payments Failing, Eh? What’s going on?

1st May, 2015 is a Labour Day Holiday in many European countries. More importantly, it is a TARGET closing day too….

Ok, what is TARGET?

Technically we should refer to it as TARGET2, since it is version 2 of the original TARGET system. Anyway, lets stick with TARGET since that’s how most people refer to it. TARGET2 is the Trans-European Automated Real-time Gross settlement Express Transfer system. In short, it is the European Central Bank’s interbank settlement system.

TARGET2 is important because all SEPA transactions are settled through TARGET2

So why will a TARGET2 Holiday cause my SEPA payments to fail?

Your bank may be open. But when TARGET is closed your SEPA payments and SEPA direct debit transactions cannot be processed.

Why are only some countries impacted?

Many European countries will celebrate Labour Day on 1st May, 2015 – this is when TARGET will be closing. But other countries celebrate Labour Day or their own respective festival on the first Monday in May.

This mismatch in the holiday dates will potentially result in SEPA payment and SEPA direct debit failures / delays

Which countries are impacted by 1st May ‘SEPA Holiday’?

I reviewed the European Public Holidays for each SEPA euro-currency country, and by my calculations only Ireland and The Netherlands will be impacted – they’re both taking Monday 4th May off….

But we need share awareness outside of the 2 above countries, for example if you’re in a shared service centre somewhere, that you will not be able to process SEPA payments and SEPA direct debit collections for value date 1-May-2015.

Please let me know if other countries are impacted and I will update this post.

Are there any other TARGET holidays?

Yes – You can see them all in my post SEPA Holidays 2015 / 2016 – YOU Need to Know These Dates! Or check out the ECB Public Holidays and TARGET Closing Days

What YOU need to do…

  • Ensure that you do not submit any SEPA payments and SEPA direct debit with a value date of 01-May-2015
  • SEPA Payments and SEPA Direct Debits will not be processed on Friday 1st May, and will most likely be processed and paid on the next business day – contact your bank to be absolutely sure how they will process your payments and direct debit collection requests
  • To be absolutely sure, process your SEPA payments and direction debit collections in advance
  • Some companies also make salary payments around about this time – again ensure that any critical payments are made in advance so that you do not upset, disrupt or encounter any payment problems

This was never a problem before…

Correct, in the old days each country had their own payment processing system which took days off according to the in-country holidays. Everything was aligned. Now ALL Eurozone countries need to be aware of the TARGET holidays and identify any conflicts.

If you’re unsure about anything….

Contact your bank RIGHT NOW, and they should be able to advise you how to proceed…

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Good luck..!

Kindly share this post through Twitter, Facebook and LinkedIn to spread awareness so that we minimise any disruption during the upcoming public holiday. As they say forewarned is forearmed. Good luck, and lets hope this year we see fewer problems than last!

 

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