Sepa: special focus
The Single Euro Payments Area (Sepa) aims to make cash transfers between European countries fast, cheap and simple – but the migration process has proved slow, expensive and complex.
Banks and corporations in the eurozone were told they must comply with the core provisions of the Sepa regulation, the EU’s flagship cross-border payments system based on IBAN and BIC, by February 1, 2014.
Firms within 32 nations – the 27 EU member states, EFTA (Iceland, Liechtenstein, Norway and Switzerland) and Monaco – have a regulatory requirement to replace their existing national euro credit transfer and direct debit schemes with the standardized Sepa credit transfer (SCT) and Sepa direct debit (SDD) via XML (extensible markup language).
However, an alarming number of companies were still not ready, so the EC was forced to intervene, adopting a proposal to allow an extra six months from February 1 when payments that differ from the Sepa format can still be processed by banks and clearing houses. There was a fear that Europe’s payment system, which handles 80 billion of transactions a year, might have been paralysed had the EC not intervened.
Today, the Euro Retail Payments Board (ERPB), chaired by the European Central Bank (ECB), is addressing post-SEPA migration issues. The ERPB is also working to achieve instant payments in euro, and person-to-person mobile payments and contactless payments.
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Looking further ahead, the UK’s access to the Single Euro Payments Area (Sepa) post-Brexit is a concern.
Domestic real-time payments are spreading as more countries adopt the technology, but the move to international, cross-currency payments is still some time off. Order The Single Euro Payments Area's (Sepa) instant credit transfer scheme (SCT Inst) went live on Tuesday, enabling payments to be made between European countries.
Unlike other European-wide regulatory initiatives, such as the Single Euro Payments Area (Sepa), it has not been implemented in a single push.
The World Payments Report unsurprisingly showed that the Single Euro Payments Area (Sepa) was having a moderate impact on Europe, but was not an issue in the US or Asia.
Questioned on what their priorities for the year would be, 25% of treasurers stated it would be complying with regulations such as Single Euro Payments Area (Sepa) and Emir. Virtual account management looks beyond Sepa’s borders
After the groundwork was laid by Sepa, virtual account management (VAM) had the chance to thrive in Europe. Now the question is how to make it work better for corporates and banks alike, and expand its use outside western Europe and the traditional corporate sector.
Europe does not have the infrastructure in place for implementing cross-border real-time payments. The ECB have called for this to happen, and EBA have recently issued an RFP to find a provider.
The rules on the revised Payment Services Directive have been finalized by the European Commission (EC), allowing third parties to initiate payments between bank accounts. But should this be a cause for concern for the traditional players?
The Single Euro Payments Area prompted a wholesale change in how European banking operates and set a precedent for other regions on the possibilities open to them.
Full Sepa implementation has facilitated the creation of an ever-more sophisticated corporate treasury landscape across Europe. The challenge now is to inform treasurers of its diverse benefits.
International banking alliances offer a number of benefits to treasurers – from FX hedging to cash pooling – while Sepa and the rise of non-bank payment providers have yet to diminish their allure.
Self-Explanatory Poll Answer...
The single euro payments area (Sepa) initiative was something so burdensome it took longer than planned to implement, but after delays transaction banks and their corporate clients stand to benefit from this payments regulation.
There is much discussion around moving towards a standardized form of banking, but who is setting the standard?
September 2014 euromoney.com
It is not common to hear about the positive side of financial market regulation. But corporate treasurers are finding ways to turn the new rules to their advantage.
What does it take to succeed in the increasingly competitive world of transaction services? Internal collaboration, global footprint, adaptability, connectivity and mobile technology all make up part of the equation. But every bank, and every client, is different.
Corporate treasurers are looking for the simple life, and having more efficient systems in place can bring its own financial rewards – but despite some advances, there is still a long way to go.
The extended deadline for Sepa is fast approaching and, despite initial fears, corporates are set to meet it – but this is the first step in creating an efficient single European payments framework. Debate about Sepa 2.0 is now in full swing.
European companies, and particularly small and medium-sized enterprises (SMEs), could yet suffer a cash-flow squeeze from direct debits under the Single Euro Payments Area (Sepa) regulation, despite the European Commission handing companies an extra six months to comply.
European companies have to be Sepa-compliant this year, and many have used this as an opportunity to tidy up payment processes to give better visibility over liquidity and cash flow.
Some companies are putting more of their efforts into complying with the Sepa project than EMIR.
The European Commission has moved to thwart the rising threat of another liquidity crisis in the eurozone by offering European companies more time to migrate to the Single Euro Payments Area (Sepa) system.
Banks are facing up to the challenges posed by the upcoming Single Euro Payments Area (Sepa), which threatens to undermine a lucrative - and historically stable - source of revenue for financial institutions, with the interchange-fee legislation adding insult to injury
Although the implementation of the Single Euro Payments Area (Sepa) presents the biggest and most pressing challenge to the European transaction banking industry at the outset of 2014, there are reasons for banks and their corporate clients to be optimistic about the year ahead.
Most corporates are still wholly unprepared for mandatory compliance with the Single Euro Payments Area, the EU’s flagship cross-border payments system, with a lack of understanding of its scope and impact.
January 2013Banks face up to Sepa deadline
The European Central Bank publishes an official progress report monitoring Sepa migration.