ABN AMRO has launched a new payments solution meant to help financial institutions minimize the cost and disruption of implementing new European Union rules for bank account numbers.
The European Payments Council’s ‘IBAN and BIC Resolution’ requires all intra-EU/EEA euro commercial payments to contain international bank account numbers and bank identifier codes. The resolution will affect all euro commercial payments coming into the EU/EEA, regardless of where they originated.
Payments that do not comply with the new rules will face repair fees in 2006 and even rejections from January 2007.
“Many banks are not aware of the resolution and its consequences, yet they will be faced with ‘repair’ fees and will have to choose between absorbing the cost or passing it on to their clients,” Ann Cairns, head of transaction banking at ABN AMRO, said. “After January 1 2007, service could deteriorate further, as banks and their clients are confronted with rejected payments.”
ABN AMRO created a routing solution that uses a bank’s pan-European branch network to route the payments directly through domestic clearing systems that are not affected by the rule changes.
“Banks know they will have to make their clients SEPA compliant by getting them to use IBANs and BICs,” Cairns said. “But for many this will take time, as they try to complete the process as painlessly as possible for their clients. Our solution gives banks the time they need to do this.”