LONDON – Bank of America Merrill Lynch, a global leader in payments, last week hosted a series of informational webcasts on key considerations for corporates as they enter the last stages of SEPA implementation. These webcasts are the latest in a series of initiatives – including client-facing sessions, forums and workshops – that the firm has generated over the past 18 months to help clients prepare for the SEPA deadline.
Led by Jennifer Boussuge, head of Global Transaction Services, EMEA, with commentary from regional head of Payments and Receivables, Ad van der Poel, the webcasts highlighted the fact that preparations and interpretations differ across today’s SEPA-zone, and that depending on a counterparty’s readiness, corporates could face a wide range of experiences.
Van der Poel noted that despite the recent spikein migration rates, adoption continues to be a challenge. “The European Commission’s recent announcement (extending the deadline by six months) has not changed the urgency with which we are treating SEPA conversion,” he said. “Our message to clients is to maintain focus and be fully compliant by the original end date so that from 1 February, direct debit and ACH payments can be made as SEPA transactions as opposed to legacy domestic ones.”
“The advantage for SEPA-ready companies is that they are already reaping the benefits of value-added migration services, such as our IBAN enrichment offering,” he continued. “But for others who were concerned about meeting the February deadline, there is now a transition window that can be utilised.”
For those companies who still have concerns, van der Poel noted that as well as technology and file formats, it is important to consider internal and external business partners such as customers, payroll vendors, human resources and employees’ banks. He also stressed the need for a contingency plan should companies be unable to make payments to vendors and employees or collect money.
“Thinking beyond the SEPA migration date and its challenges, there are broad efficiencies to be gained from the regulation’s adoption,” added Jennifer Boussuge. “SEPA should be viewed not as a hindrance, but rather as a catalyst for visibility and control. For example, SEPA adoption provides an opportunity for automation, rationalisation and centralisation, which can then help with efficiency gains in all areas of business.”
Boussuge asked the audience to imagine:
- Reusing the same standards and data elements in the invoice and in the purchase order – which will lead to enormous efficiencies in a corporate’s value chain.
- Creating an innovation such as a new mobile payment method where the underlying payment instrument covers the entire eurozone – meaning that the reach of an innovation is immediately expanded from one to 33* countries.
“While it’s challenging to predict what will influence your business a decade from now, through your actions today, you can shape and build the foundations for innovations in the years to come,” Boussuge concluded. “There is light at the end of the tunnel and numerous benefits to consider once the scheme is in full force.”
* San Marino joins the eurozone on 1 February 2014, taking the number of member countries to 34.