Finance teams that understand what SEPA compliance entails can leverage the euro-centric initiative to improve efficiency worldwide.
By Andrew Owens|September 10, 2013 at 11:25 AM
Thank you for sharing!
Your article was successfully shared with the contacts you provided.
For many companies operating in the Eurozone, the deadline for the Single Euro Payments Area (SEPA) is looming large on the horizon. As of February 1, 2014—less than five months from today—all domestic credit transfers and direct debits denominated in euros will need to be processed using SEPA credit transfers (SCTs) and SEPA direct debits (SDDs). PwC estimates that these payments account for between 40 percent and 95 percent of in-country transaction volumes. Yet because the European Payments Council took a while to announce the so-called “end date” for SEPA compliance, some corporations kept their SEPA projects on hold for years. The projects should be in high gear at this point.
SEPA-compliant payment processing requires some fairly complicated changes to the way that accounts receivable (A/R) and accounts payable (A/P) software stores and accesses data about a company’s banks and customers. It also requires that domestic financial transactions use SEPA-specific formats. Organizations that haven’t yet begun the transition, or those in which the SEPA initiative isn’t making rapid progress, may find themselves unable to make or collect euro-denominated payments six months from now. A PwC study released last month found that systems for SEPA-compliant payment processing are currently operational in only 11 percent of companies. Twenty-one percent of SEPA projects are still in the design phase, and 10 percent of companies are just now assessing their needs.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing. Once you are an ALM digital member, you’ll receive:
Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices,
case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
Exclusive discounts on ALM and Treasury & Risk events.
Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.