In a recent white paper, SWIFT identified a series of steps firms need to take when building a Single Euro Payments Area (SEPA) migration plan. The white paper comes ahead of the EUs February 1, 2014, deadline for migration to SEPA credit transfers (SCT) and direct debit transactions (SDD) in euros.
SEPA is the plan to standardize payments in EU member countries by eliminating national designation schemes for payments and instead using a standardized combination of IBAN and SWIFT identifiers. That will increase efficiency of cross-border payments, whereby all payments inside the SEPA zone will be considered domestic.
SWIFT says meeting the 2014 deadline, by which the national designation schemes must be eliminated, and complying with SEPA standards must become a priority for banks and corporates right away. SCTs and SDDs are the standards for credit and debit transactions, respectively.
Twenty-four months to move to full SCT and SDD usage is a serious challenge for all institutions, SWIFT said in a statement. Even those [institutions] that are fully operational and have complete migration plans will have to refine and scale up their processes and applications to meet their obligations.
SWIFTs step-by-step plan for banks and corporates involves: building a clear picture of the instruments firms are already clearing and where; creating a SEPA checklist with what needs to be done to migrate to SEPA; determining the business value for achieving compliance; and selecting the right messaging provider to support the firm.
(CG)