One in three organisations runs the risk of being too late with its preparations for Sepa, this is one of the key findings of a current research by PwC.
22nd October 2013
The Single Euro Payments Area (SEPA) is a project to harmonise the payments in 33 European Countries, an initiative of the European banking industry – it will make all payments across the euro area- which include debit card, credit card and bank transfers as easy as domestic payments within one country. The project is strongly supported by the European commission and the European Central Bank. Despite the common currency in place, there were some bottlenecks for payment of goods and services in euro countries, for e.g.it is not so easy to pay for your goods and services electronically in other euro country, with your bank debit card and when you want to transfer money from your bank account to an account in another euro area country, the payment could take longer, and get delayed. However, with the introduction of Sepa, transfers will be swift, secure and faster, so even when you are shopping in a European country, you can make use of your debit card to make a payment in euro.
Sepa will also help to improve all payments, including domestic and cross border payments between two European countries. All consumers will benefit from the new rules ensuring transparent pricing and prompt transfers.
SEPA Council
The SEPA council is co-chaired by representatives of the European commission and European Central Bank composing of: 5 representatives from the user side of the market which include consumers, retailers, businesses and national authorities, 5 users from the supplier side which include The European Payments Council, Co-operative Banks, Savings Banks and Payment institutions). The council would also comprise of 4 central bank board members – representing the euro system.
Last month, “Financial News” carried out a report in which it explained the case study of a German based manufacturing firm, Villeroy & Boch for being an early adopter of the Single European Payments Area instrument. It completed migration to Sepa credit transfers in 2008 and to both core and business to business (B2B) Sepa direct debits in 2011. Dr. Markus Warncke, the group’s financial controller, said early migration to Sepa has enabled the company to centralise its cash management as well as streamline internal processes, lower technology costs, reduce bank charges, consolidate bank and cash management systems and integrate its payments business to improve efficiency. Villeroy & Bosch processes about 175,000 credit transfers with a value of € 310 million and 25,000 direct debits totalling € 75 million a year.
Corporates not ready: PwC Survey
One in three organisations runs the risk of being too late with its preparations for Sepa. This is one of the key findings of a current research by PwC. “It worries us that almost half of the surveyed organizations claim not having a “plan B” in place,” said Bas Rebel, senior director at PwC, Netherlands. “The goal was to paint a picture about the progress of Sepa readiness of organisations during the past six months. In January 2013, we found that 55 percent of the respondents were at risk of not being ready to Sepa- by the February 1st, 2014 deadline. 43 percent of the respondents said they were uncertain whether their clients would be ready before the deadline passed. “In June 2013, we took a fresh snapshot. The good news is that more organisations seem to have become active in getting ready for SEPA, compared to the situation in January 2013. The bad news is that one out of the three surveyed organisations runs a high risk of not meeting the deadline” he said.