On 1 February 2014, all national euro payments – credit transfers and direct debits – will switch to the Single Euro Payments Area (SEPA) format. Under the SEPA End-date Regulation, banks are not allowed automatically to convert non-SEPA payments to SEPA payments after Feb 2014. This means retailers will have to make changes to the way they make and receive payments.
Paul Alfing, chair e-Payments Committee Ecommerce Europe: “Don’t underestimate the effect if you are not migrated to SEPA on time, because transactions in old formats will not be processed by the bank. In other words: if you are not ready, you can’t pay or be paid anymore”.
Here is a basic list of the steps which will need to be taken:
- Banking and accounting software must support the technical messaging standards used for SEPA Payments (ISO20022 – XML)
- Get the BIC/IBAN of all your customers and suppliers (central conversion service in your country).
- Print your BIC & IBAN on ALL your business papers (not only for cross-border business).
- Identify any optional or AOS (Additional Optional Services, which are services a bank can offer in addition to those in the SEPA Rulebooks) that have been implemented in your country.
- Consolidate the local and cross-border payments in one SEPA system.
Merchants need not do this on their own: your banks will help. We strongly advice you to contact your bank to find out what specifically you need to do for your business. It will be possible for banks or other providers to offer conversion services – as long as these are independent of the banks’ normal payment chain. They will also be at extra cost for the retailer (if his systems are not SEPA-ready). In addition, such services will be available only for a limited time.