According to the Financial Services Club, only 20% of corporates are ready for a SEPA implementation by February 1, 2014.
To help companies navigate the SEPA regulation, SunGard has outlined key technical requirements and practical steps to becoming compliant. These requirements which revolve around the two main schemes, Credit Transfers and Direct Debits are summarised below and further explored in the whitepaper, SEPA Compliance – A Guide for Corporate Treasurers. The white paper also explores the idea that the advent of SEPA presents an opportunity for large Corporates to further evaluate their payments processes and systems to look for ways to create improvements and efficiency gains which could help them achieve a competitive advantage.
The technical requirements for SEPA Credit Transfers include:
1. The ability to supply IBANs for domestic transactions and IBAN and BICs in cross border requests which will require the cleansing of supplier data and the potential need to implement a Payment Factory to facilitate necessary conversions and enrichment.
2. The use of the ISO20022 XML based message format which could require changes to back office systems, or the implementation of a Payment Factory to help insulate the back office from these changes.
The technical requirements for SEPA Direct Debits which go beyond data and formats and include:
1. The storing of customer mandate information which will require an audit of existing mandates and the potential establishment of a process / software solution to support the management of mandates.
2. The ability to supply IBANs for domestic direct debits and IBAN and BICs for cross border requests which will require the updating and cleansing of master data.
3. The use of the ISO20022 XML-based message format which could require the utilization of a SEPA Direct Debits Mandates and Transaction Processing solution or changes to back office systems.
4. Support of the scheme rules and R-Messages which could require the utilization of a SEPA Direct Debits Mandates and Transaction Processing solution or changes to back office systems.
While these requirements have the potential to trigger significant amounts of work, SEPA also presents an opportunity for large corporates to make several efficiency gains and to rationalise and centralize payments. As such, corporates seeking to embark on a global payments reengineering project will likely want to start this in conjunction with a SEPA project.
Andrew Owens, senior vice president, enterprise payments, SunGard's Corporate Liquidity business, said, “With 1st February 2014 as the clear line in the sand for companies to make Euro payments as they do today, it is imperative for those who have not yet begun to make SEPA preparations to act now in order to protect their businesses. While attaining compliance may seem a sizeable task, a clear understanding of the technical requirements involved can not only help ease the complexity of planning for and implementing such a project, but also bring into focus additional opportunities that can be capitalised on.”