Benefits of SEPA
The SEPA directive details the rules by which euro payments must be processed by financial institutions in the SEPA community. It dictates, for example, the maximum processing time for a payment, where charges can be incurred and the information to be included on the payment. The rules have been developed with the customer in mind and hence offer a number of benefits on current processing.
Quicker payment transactions
SEPA sets a maximum delivery time for credit transfers so you can be confident of when payments will arrive in the recipient’s account.
From 2008 SEPA Credit Transfer payments will be credited in 3 days.
From 2010 this is scheduled to be reduced to the next working day.
This gives certainty of the delivery of payments and, in some instances. it may be possible to use a SEPA payment rather than an urgent premium payment method.
Improved reconciliation capability
Recipients will receive the full value of payments sent. This, along with future movements towards increased remittance information will significantly improve reconciliation processing.
Greater transparency in payment pricing
Transparent pricing will enable customers to re-assess banking providers and ensure that value for money is being provided by their bank.
Removal of barriers to European market entry
It is likely that the introduction of SEPA will reduce the cost of making and receiving euro payments throughout the community.The reduction in banking costs and the potential to consolidate some banking arrangements will remove one of the barriers to entry in many European markets.This will therefore give your business the opportunity to compete more equally in the European marketplace.
Ability to consolidate cross-border treasury management and banking arrangements
SEPA states that all euro payments across the community are to be treated with the same set of regulations no matter where they begin or end.This presents your organisation with the opportunity to centralise your accounts for euro transactions,and consolidate your treasury and banking arrangements.
Fewer formats
IS0 20022 has been developed to define a single approach for all payment formats via financial messaging.
Over time it will enable interoperability between financial institutions and their customers throughout the community, and will radically reduce the number of payments formats to be supported.
We are currently developing IS0 20022 capabilities and will keep you informed of changes in this important area. Until then we recognise the need to minimise impact on our customers and so will continue to accept payments in your existing formats.