SEPA migration end date is clear … what’s now?

Posted on 17. May, 2012 by in Exact Globe Next

Now that the end date for the Single Euro Payments Area (SEPA) migration has been agreed upon within Europe, the industry has begun to realize the challenges that it will face the coming years. The good news is that a clear target date is set. In the euro area, this will be 1 February 2014, subject to certain limited exemptions mentioned in the SEPA Regulation. The bad news is that many are still in the preparation rather than execution phase. It is indisputable that the migration to the SEPA will be a challenging exercise. Market participants still need to evaluate its impact on their day-to-day operations. Migration to SEPA standards requires careful planning. The relevant actions and resources should be identified as soon as possible.

In this article I would like to share a general overview of SEPA compliance statuses as well as some short term plans of Exact Globe Next functionality for customers in countries of EU Member States.

SEPA was generally introduced in the product update 390, in 2008, and has been constantly improving since then.

We have chosen a flexible approach, with which we have implemented and support SEPA Credit Transfer for all EU countries based on general ISO20022 standard guidelines in 2009. Since 2010 we continued with extending SEPA functionality for frontrunners countries: the Netherlands, Belgium, Germany and Austria based on their national guidelines.

We are committed to plans for improving SEPA support in Exact Globe Next for all eurozone countries during 2012 and 2013.

IBAN and BIC. Customers are able to maintain IBAN and BIC in cash instruments and in debtor and creditor bank accounts in countries of EU Member States. Furthermore, to facilitate better and faster migration of bank accounts data into IBAN and BIC Exact Globe Next offers automations of generating these values for some countries or importing IBAN and BIC to debtors and creditors bank accounts for other countries.

IBAN and BIC are also included in most of layouts. For example the Exact customer in the USA is able to manage IBAN and BIC data of French debtor bank account and print this information in the sales invoice.

XML ISO20022 standards. Being based on ISO20022 standard, SEPA guidelines are allowed to be extended at the national level. Changes in national SEPA guidelines are prevail. At the same time banks within the same country are allowed to follow national or strictly EU guidelines or even extend such guidelines. Bank extensions to guidelines are prevail. Implementation of national SEPA migration plans are dependent on such diversity. Communications regarding relative technical and functional specifications as well as the speed of SEPA development in each country are different.

SEPA Credit Transfers (SCT). SCT functionality is available in Exact Globe Next for all customers and for all legislations as soon as the cash instrument and the creditor bank account are within EU and linked to euro. The frontrunners countries are having much better support of their SEPA standards.

SEPA Direct Debit (SDD). SDD was introduced in the product update 400 in 2010. This functionality is available for all customers of Exact Globe Next and for legislations as soon as the cash instrument is in the Netherlands, Belgium, Germany or Austria and linked to euro and the debtor master data is provided with IBAN and BIC and the information of relative SDD mandate exists. SDD mandate management is necessary part of the functionality. Being generally compliant to XML ISO20022 standard, the structure and content of SDD are implemented based on its national extensions.

Bank statements with SEPA information. SEPA includes a definition of Cash Management (CAMT), the XML based generic bank statements structure. The introduction of this standard, at the moment, gets lesser priority compare to IBAN and BIC, SCT and SDD. Expiration time lines for currently supported bank statements are not yet clearly defined. Therefore the majority of banks extend their bank statements specifications so that remittance information of SEPA transactions can be identified for reconciliations. Currently we keep implementing changes in existing bank statements in different countries, based on their specifications.

SEPA is a topic that can be addressed in different ways than just compliance. Starting now gives some, although limited, time to plan for changes taking possible benefits into scope. It is important to recognize that the impact of SEPA implementation goes beyond Europe. Compulsory usage of the ISO20022 standard certainly will be later considered for a global roll-out outside the eurozone.

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7 Responses to “SEPA migration end date is clear … what’s now?”

  1. Robert Ruijgrok

    01. Jun, 2012

    Hi Alexander, in your post you mention

    “Furthermore, to facilitate better and faster migration of bank accounts data into IBAN and BIC Exact Globe Next offers automations of generating these values for some countries or importing IBAN and BIC to debtors and creditors bank accounts for other countries.”

    Is this already available? Or else, in which batch will this be so?

    Reply to this comment
  2. Alexander Kutilov

    05. Jun, 2012

    Solutions are now available for accounts banks in Austria and in Belgium. The solution for NL bank accounts with help of NVB service is planned for the next product update, which is planned for October 2012. In the same product update we shall also provide a generic solution for generating IBAN for most European bank accounts.

    Reply to this comment
  3. Rich

    13. Aug, 2012

    Hi Alexandra

    Is it the case that it if I mark a cash instrument as SEPA Direct Credit then I cannot use this Cash Instrument for ACH or Priority Payments? It only Produces SEPA format XML files?


    Reply to this comment
  4. Rich

    13. Aug, 2012

    Hi Alexandra

    Also may I enquire if Exact Globe supports Priority Payments Scheme?

    Reply to this comment
  5. Alexander Kutilov

    03. Sep, 2012

    Yes. Priority payments are also included in the solution.

    Reply to this comment
  6. Sepa transfer

    03. Jul, 2013

    Excellent post! SEPA is an initiative of the European banking industry that will make all electronic payments across the Euro area. Sepa migration end date is 1st Feb, 2014 for both direct debit and direct credit.

    Reply to this comment
  7. Bnp Paribas

    04. Oct, 2013

    There are multiple guidelines on the internet concerning this migration process. Despite these, many seem to have issues in implementing SEPA. So…we’ll the authorities extend the time allocated for this process?

    Reply to this comment

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