by Tony Richter, SEPA Programme Director, Payments and Cash Management, HSBC
News that the European Commission has proposed a grace period of six months for companies to be SEPA compliant is welcome, but it comes with a warning that companies must now put SEPA compliance high on their ‘to do’ list. Companies, large and small, need to be able to make payments in the SEPA format in order to continue to function. Those that are not compliant will not be able to pay staff and suppliers, or receive payments from customers, with damaging consequences for their business and the broader economy.
SEPA was developed by the European Payments Council (EPC) to create a borderless system of Euro payments with enhanced clarity, consistency and efficiency. The goal is to make SEPA transactions as easy to send and receive as domestic Automated Clearing House (ACH/non-urgent batch/Autopay) transactions are today. Companies should be talking to their banks today to ensure that they have a robust plan to ensure SEPA compliance as soon as possible. There are a number of benefits, in both the short and long term, to doing so. Companies can easily avoid the scenario of payments not being processed by talking to their banks and their IT suppliers now. A robust project plan will save time, money, reputational damage and regulatory breach.