Final date for SEPA changed on low take-up
IN A last-minute saving grace for businesses, the European Commission has been forced to postpone the deadline for compliance with new electronic payments system Single European Payments Area (SEPA).
Yesterday it adopted proposals that would allow businesses to accept payments that differ from the SEPA format for another six months.
The proposals must still be adopted by the European Council and Parliament. If passed, the new deadline for compliance with SEPA will be August 1.
SEPA is a common payment processing system across the EU, being introduced to make trading easier.
Once the deadline for compliance passes, companies that have not upgraded their systems will find that credit transfers and direct debits will cease to function, meaning suppliers and staff cannot be paid and payments will not be received.
A survey by the Irish Small and Medium Enterprises Association (ISME) last month showed that a mere 22pc of Irish SMEs were SEPA compliant. The European average is only slightly higher, at 26pc.
Internal Markets and Services Commissioner Michel Barnier said the decision was necessary to tackle an "urgent" situation.
"I regret having to do this but it is necessary to counter the substantial risk of disruption to payments and detrimental consequences," he said.
The chief executive of Maynooth-headquartered financial payments firm Sentenial warned businesses to take the new deadline seriously.
"It is crucial now that non-compliant firms use the six-month grace period to implement robust SEPA systems," said Sean Fitzgerald.