The Single Euro Payment Area (SEPA) will affect companies making and receiving euro payments in Eurozone countries from 2008, including those headquartered outside the Eurozonem, but in order to benefit, companies must brace for the related operational changes, says ABN AMRO.
SEPA is supposed to eliminate national differences in payment instruments and processing infrastructures in Europe and ensure uniform quality, timeliness and costs for cross border transactions in euros within SEPA. To achieve this, new payment instruments will be introduced: The SEPA Credit Transfer (SCT), the SEPA Direct Debit (SDD) and the cards framework, for transactions in euros across the Eurozone.
“SEPA will go a long way to fulfilling the expectation of a ‘one country market’ in Europe, reducing complexity, efficiency and lowering transaction costs,” said Ann Cairns, CEO, transaction banking at ABN AMRO. “The opportunity is extensive. By 2008, SEPA is likely to comprise up to 18 countries as new EU entrants, such as Estonia, Lithuania, Slovenia, Cyprus, Latvia and Malta, join the 12 existing Eurozone members.”
ABN AMRO advises that in order to prepare for SEPA companies should name a person in the organization to determine the impact of SEPA and devise a strategy; start a programmer to include International Bank Account Numbers (IBANs) and Bank Identifier Codes (BICs) on all invoices; obtain the IBAN and BIC from all counterparties in the Eurozone; discuss the impact of SEPA with trading partners and identify early adopters to work with during the transition.