As the August 2014 SEPA deadline looms, there is a keen interest from all SEPA stakeholders to understand the share of SEPA transactions as a percentage of the total volume of payments and direct debits in the SEPA zone. Generally the SEPA implementation rate is increasing, but as this article indicates (even based on May statistics) with just a month to go there is still plenty to do…
This post references statistics published at: ECB SEPA Quantitative Indicators.
SEPA Credit Transfers as a Percentage of all Credit Transfers:
- January 2014 – 83.13%
- February 2014 – 93.91%
- March 2014 – 95.65%
- April 2014 – 96.21%
- May 2014 – 96.86%
Clearly the February 2014 deadline was too optimistic. But in the immediate aftermath good momentum and impetus led to significant jumps in the number of SEPA Credit Transfer implementations. But check out the growth since March 2014!!! By my calculations in the 3 month period from March through to May SEPA Credit Transfers grew by just 1.21%. That is pretty dismal.
If we look at the ‘lagging’ countries, there is another worrying trend:
- Austria (86.6% *), Greece (88.5%), Germany (89.7%) – there are potentially 3 countries with just over 10% of their Credit Transfer activity happening in a non-SEPA compliant manner
- Italy (95.3%), France (95.8%) – these countries have seen very little growth in the last few months, when compared with other nations and previous growth patterns
- The Netherlands (96.1%) – the percentage of SEPA Credit Transfers has remained static since April 2014
* Percentage is unclear due to the Austrian niche payment product being included in the statistics
The intention here is not to paint a bleak picture, just to share the story behind the statistics. Clearly there are some positives, there are 9 countries where the percentage of SEPA Credit Transfers is 100% !!!
SEPA Direct Debits as a Percentage of all Direct Debits:
- January 2014 – 60.23%
- February 2014 – 80.26%
- March 2014 – 82.6%
- April 2014 – 85.72%
- May 2014 – 88.19%
Lets start with the good news. There are 3 countries where the percentage of SEPA Direct Debits is 100%. The rest, unfortunately, is a complete mix. The following table shows the degree of variation:
- 60-69% – 2 countries
- 70-79% – 1 country
- 80-89% – 5 countries
- 90-99% – 4 countries
- 100% – 3 countries
Clearly, there is still a lot to do with regards to SEPA Direct Debits. The consensus is that the EPC made SEPA Direct Debit’s too complicated and this has somewhat ‘put off’ many companies. Overall each country has shown some progress in their SEPA direct debit implementation. There are 2 countries however worth noting:
- Ireland – The Irish Payment Services Organisation (IPSO) in agreement with the Central Bank of Ireland defined a national SEPA end date of 31st March 2014. So, this is one country where the deadline has come and gone and some of the direct debit transactions (1% in April, 0.4% in May, 2014) are still not SEPA compliant
- Cyprus – The SEPA Direct Debit percentage went from 24.6% in March to 84.7% in April, 2014. In May 2014 though, the percentage slipped back to 64%!! I’ve no idea what may have caused that!?!?!?!
Overall, there is a slow upward trend for SEPA direct debit implementation but time is once again clearly against us.
Where next?
The figures for June 2014 should show SEPA Credit Transfers increasing overall to near 99%. The concern here is that there are a few countries where the statistics have been very slow or even static for the last few months. The EPC should be looking into what and why this is happening.
The greatest concern and focus area for the EPC should be SEPA direct debits. The EPC should be targeting those lagging countries and supporting their implementations to ensure minimal disruption to the SEPA zone after the August 2014 deadline. With a month to go, the EPC should be rolling up its sleeves and working directly with the responsible national organisation to ensure SEPA readiness.
In addition to this, I believe the EPC should review SEPA in Ireland. The EPC ought to have one eye on the landscape post August 2014. Considering that Ireland is a country where the SEPA deadline has passed, but it is not quite SEPA compliant – what are the lessons to be learnt? What is going well, what is not going well? With their findings from Ireland, the EPC should be using this as a reference for the rest of the SEPA zone. How can the EPC ensure that the remaining countries do not face the same issues / pain points as customers and suppliers in Ireland? To safeguard other European countries from the same issues as Ireland, this assessment should happen right away.