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‘Awareness does not necessarily mean preparedness’

In an article on GTNews.com, a website for news on global treasury and finance, Javier Santamaría, chairman of the European Payments Council, wrote that organisations should avoid bottlenecks and get ready for SEPA now. According to the chairman there is still a worrying lack of recognition among some companies, seen in the many calls to extend the deadline (February 1, 2014), will not make any change in the SEPA deadline.

With the introduction of SEPA, all existing national euro credit transfer and direct debit schemes will be replaced by SEPA credit transfer (SCT) and SEPA direct debit (SDD). Almost everyone is aware of this transition, but there is still a lot of work that needs to be done. “Awareness does not necessarily mean preparedness, some companies still have serious catching up to do and time is getting tight”, warns Santamaría.

According to the updated qualitative SEPA indicators on the ECB website, a lot of countries are behind schedule when it comes to migrating to SEPA. A previous blog post on the Equens blog mentioned this research.

Santamaría added, “The data indicates that ‘big billers’ in almost all euro area countries are expected to complete migration to SCT and SDD by February 1, 2014 as mandated by the SEPA Regulation. According to these indicators, it appears currently that the corporate sector in France might not complete migration to SDD on time, companies in Estonia are at risk of not meeting the deadline with the SCT migration. The indicators show, for the first time, migration progress by SMEs at country level. The findings are worrying. It is estimated that SMEs in Austria, Cyprus, Estonia, France, Germany and Spain will not manage to complete the transition to SCT and SDD by February 1, 2014.”

For the countries that are behind, Santamaría reminds them that there will be no extension. There won’t be a plan B.

To illustrate this, Santamaría quotes Wiebe Ruttenberg, Head of Market Integration Division at the ECB, in the April 2013 edition of the EPC Newsletter. Ruttenberg pointed out that there is no plan B, operating outside the law is not an option, PSPs will be obliged to refuse further processing of payments that are not delivered in the right technical format. Ignoring the risks of non-compliance would be a mistake.

In addition, Santamaría writes that the ECB strongly advocates that all PSPs should have their customer service channels ready for SEPA transactions by the end of Q2 in 2013. “All other stakeholders, including ‘big billers’, public administrations and SMEs, migrate at the earliest stage possible, preferably by Q3 2013 at the latest. This approach, says the ECB, avoids risks which otherwise could impact the wider supply chain, and ensures timely SEPA migration.”

According to Santamaría, the focus must now be on joining forces to assist SME’s and local public administrations in the euro area that must meet the February 1, 2014 deadline. “This requires coordinated efforts by national public authorities, and trade associations representing business and banks. The Council of the EU called on ‘all member states to significantly intensify communication measures primarily at a national level to eliminate existing public awareness gaps’.”

Santamaría acknowledges that the transition is difficult, but according to him SEPA pays off. “There is no doubt that the scope of change required to ensure SEPA compliance is extensive, but it does pay off. Early adopters on the demand side, who reported on their SEPA migration experience in the EPC Newsletter case studies, confirm that full compliance will lead to more streamlined internal processes, lower IT costs, reduced costs based on bank charges, a consolidated number of bank accounts and cash management systems, and more efficiency and integration of any organisation’s payment business. So, let us all embrace the change.”

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