Treasury News Network

Learn & Share the latest News & Analysis in Corporate Treasury

  1. Home
  2. Payments - Receipts
  3. SEPA Payment Structure & Services

The new SEPA issues after THE announcement and What to do about SEPA……

Large MNCs with major volumes of payments and collections in the SEPA region are, as you would expect, mainly ontop of their SEPA rollout programmes. However, new issues have emerged now the European Commission has announced (even though it is not legally approved) that there will be an additional six-months transition period. cCorporate treasurers are concerned about how to ensure that:

  • their group completes the formats and systems conversion to SEPA, e.g. when the Irish banks announced that they could not make the February deadline and would continue to have the legacy clearing system operational most corporates stopped working on SEPA. (This is now the biggest SEPA problem for an Assistant Treasurer of a global MNC in Europe.)
  • SMEs in Europe keep their conversion programmes going, instead of stopping their conversion programmes for a few months until it is again too late to convert in time. 

Other issues and problems on the SEPA announcement being discussed include:

  • when will the announcement be confirmed legally
  • can businesses send IBAN-only payments from 1 Feb 2014 or must they provide the BIC as well? 
  • what will happen if a payment fails because it does not comply with the SEPA technical requirements? Who bears the cost and effort in repairing and re-processing it?
  • what happens if a country votes against accepting the six-month extension?
  • remember that the EPC only recommends that all market participants in the euro area continue working towards meeting the 1 February 2014 deadline since the modification of the Regulation (EU) No 260/2012 as proposed by the European Commission has not yet been confirmed by the European Parliament and the Council of the EU.

Accept the inevitable and go for a new approach

The ECB, the ECB and the EPC have been trying to do a mixture of the possible and the impossible, they should accept that:

  1. the introduction of SCT by 1 August 2014 is reasonable, possible, and do-able, but only if they adopt new approaches to converting the SMEs, e.g. asking and giving support to others to take the lead in the conversion programmes such as large MNCs or the data conversion companies, etc.
  2. there is only have the time and resources before 1 August 2014 to just focus on this SCT conversion task only
  3. the SDD conversion programme is not going to be achieved by 1 August 2014 (it never was: to expect the SEPA regionto go live 12 months after the final standards were released was just bizarre) 
  4. announce a new 12 months additional transition for the date for the SDD scheme ONLY 
  5. put in place a detailed direct debit to SDD conversion programme that uses all participants as for SCT. 

CTMfile take: We cannot go on with the current plans, there are too many loose ends and too much to do to achieve everything before 1 August 2014 for both SCT and SDD.

Like this item? Get our Weekly Update newsletter. Subscribe today

Add a comment

New comment submissions are moderated.