The impact of SEPA on companies
Benefits
Saving time and costs
Using the SEPA payment instruments, companies will be able to perform all euro-denominated payments centrally, from a single account. After 1 February 2014, the handling of payments in euro will be easier, as all incoming and outgoing payments will take the same format. This will enable companies to consolidate their payments and liquidity management in one location. The Payment Services Directive obliges payment service providers to process payments within certain time limits (one business day for electronic payment orders). For European-wide business, SEPA will save money and time.
Electronic services
SEPA payments will be combined with eSEPA services, such as e-invoicing or e-reconciliation. They will help companies to further optimise the handling of payments. Today these services are often offered only nationally, as different formats and rules make cross-border use difficult. Standardised SEPA schemes will make it easier to overcome these obstacles.
Key elements of SEPA migration end-date regulation (Regulation No 260/2012) and impact on companies
- IBAN will be the account identifier
- By 1 February 2014, the IBAN will be the payment account identifier for carrying out national and cross-border credit transfers and direct debits in euro within the euro area Member States. For non-euro area Member States, the IBAN will be the account identifier for payment accounts in euro from 31 October 2016.
- Common data elements and message formats for credit transfers and direct debits in euro
- By 1 February 2014, ISO 20022 XML will be the message format used for sending or receiving credit transfers and direct debits in euro which are bundled together for transmission. Member States may opt to defer this requirement until 1 February 2016. Microenterprises are exempted from this requirement, unless they request the use of these message formats. Notwithstanding a possible waiver, payment service providers (PSPs) must use the ISO 20022 XML message format if requested by a payment service user (PSU).
Specified data elements will become mandatory in all domains of the payment chain (i.e. PSU-to-PSP, PSP-to-PSP and PSP-to-PSU).
- Free choice of EU location of a payment account with Europe-wide reachability
- The SEPA migration end-date regulation ensures that businesses are able to send credit transfers and/or direct debits in euro to payment accounts held by payees and/or payers with PSPs which are located in other Member States and which are reachable in accordance with the regulation. The regulation stipulates that all payees’ and/or payers’ payment accounts reachable for a national credit transfer and/or direct debit in euro should also be reachable via a SEPA credit transfer and/or direct debit scheme.
- Phasing-out of BIC
- After 1 February 2014 for national payment transactions and after 1 February 2016 for cross-border payment transactions, PSUs will not be required to indicate the BIC of the PSP of a payer or a payee. Member States may defer the requirement relating to the provision of the BIC for national payment transactions until 1 February 2016 (link to the overview table with national key facts).
- Direct debit mandate
- Mandates for recurring direct debits in legacy schemes will remain valid after 1 February 2014 and will be considered as representing the payer’s consent to his/her PSP to execute direct debits.
- Phasing-out of €50,000 ceiling for equal charges
- As of 31 March 2012 charges levied by a PSP on a PSU in respect of cross-border payments are the same as those levied for corresponding national payments of the same value and in the same currency irrespective of the transaction’s amount.
Related links and documents
