by Chris Winter, Region Product Executive, J.P. Morgan Treasury Services
Have corporates thought through how they will work with their banks to take advantage of SEPA Direct Debit (SDD), the world’s first pan-regional cross-border direct debit instrument that debuts in November, 2009?
SDD products and processes will completely transform direct debits in Europe, and banks will find themselves in an ideal position to offer accurate, timely and practical advice to clients. Corporates are facing the dilemma of whether to keep an in-country bank solely for domestic direct debits and use a separate cross-border bank, or migrate to a single international bank that can offer a holistic solution.
At its heart, SDD is ultimately about benefiting the consumer as well as the corporate by helping to simplify their cross-border transactions. It may be the best mechanism currently available to give a corporate greater control over the collections process as well as providing plenty of opportunities to automate it. For business to consumer direct debit payments, the new regulation will enforce banks in the Eurozone to offer payment services in euro via this new instrument from November 2010.