From the October Special Report issue of Treasury & Risk magazine

SEPA: The Gateway to New Value-Added Services

By Arthur Brieske, Global Head of Innovation and Commercialization & Americas Regional Head of Product Technology Management, Global Transaction Banking, Deutsche Bank, and Martin Runow, Head of Cash Management Corporates for the Americas, Global Transaction Banking, Deutsche Bank

On February 1, 2014, migration to the single euro payments area (SEPA) credit transfer (SCT) and SEPA direct debit (SDD) will become a reality. Rather than looking at this as an end-date, it should be viewed as the beginning of new and exciting centralization, automation and standardization opportunities for corporates. They will now have the opportunity to concentrate on the resulting benefits of SEPA compliance instead of focusing on looming deadlines and rising implementation costs.

Realizing the Value of SEPA

Martin Runow, Deutsche BankDeutsche Bank can help clients improve centralized payment processing efficiency through its Accounts Receivable Manager (ARM) for SEPA solution. This corporate cash management service helps global organizations to streamline and simplify the complexities of receivables management. Deutsche Bank developed ARM with PayPal, a leading global payments company, to help manage their euro receivables across Europe using a single consistent reconciliation process, while also reducing administrative costs and increasing customer satisfaction. ARM is a fully-automated payer identification solution that enables auto-reconciliation of incoming SEPA credit transfers, while significantly reducing the need to maintain multiple bank accounts for separate lines of businesses.

International Bank Account Numbers (IBANs) that are required for SEPA compliance provide a structure for automated payer identification without the need to match existing client data and improving auto-reconciliation rates up to 100%. IBANs are ready-made to serve as unique identifiers for routing of payments. On incoming payments (collections) customers use the “virtual account” number or IBAN that can then be used as a reconciliation field, enhancing automatic reconciliation rates and accelerating account posting. For outgoing payments, the IBAN is used to indicate to suppliers the entity on whose behalf payment is being made in a standardized way. This significantly reduces supplier queries on funds that they have received and supports their own reconciliation efforts. Deutsche Bank is the only provider in the market to offer this type of fail-safe approach to reconciliation.

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