On 1 February 2014, all retailers, wholesalers, and international traders – big and small – need to be ready for SEPA. Paul Alfing, chair e-Payments Committee Ecommerce Europe: “Don’t underestimate the urgency of migration to SEPA. No migrations means not be able to pay or be paid after the end-date. Start today making the technical changes necessary for the SEPA migration date in the euro area of 1 February 2014”.
A recent ECB report on SEPA migration shows that many payment participants have not completed necessary steps and that late migration may expose stakeholders to the risk that their payments are not handled smoothly.
Consequences of no migration
On 1 February 2014, all national euro payments – credit transfers and direct debits – will switch to the SEPA format. This means retailers will have to make changes to the way they make and receive payments.
It is important to understand the consequences of not being ready: Under the SEPA End-date Regulation, banks are not allowed automatically to convert non-SEPA payments to SEPA payments after February 2014. This means that transactions in old formats will not be processed by the bank.
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.
Basic list of necessary steps
Start now to avoid any potentially costly problems with their payments after Feb 2014. But, merchants need not do this on their own. Your banks will help, so contact your bank to find out what specifically you need to do for your business. Some necessary steps are:
- 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.