SEPA for corporates: On the path towards cross-border harmonisation

This paper reviews the evolution of the Single Euro Payments Area (SEPA) by identifying a number of areas in relation to efficient cross-border use of SEPA credit transfer and direct debits. Many international companies would like to make use of the harmonised SEPA proposition and centralise their payments and receivables flows. For those focusing primarily on the benefits of operating on a cross-border basis, which is one of the key opportunities envisaged for the SEPA, it is important to assess the degree and detail of emerging national approaches in terms of the implementation of the ISO 20022 XML standard, the types of national or regional Additional Optional Service and the different clearing practices associated with these. Other areas, such as mandate management in the case of direct debits and creditor identifiers or the prolonged coexistence of several domestic ‘niche schemes’, must be taken into account by companies that operate in a number of SEPA markets. Member states, EU regulators and supervisors, and the European Payments Council continue to focus on the harmonised implementation of SEPA. In this context, the SEPA Regulation, which mandated migration to the SEPA across the Eurozone by 1st August, 2014 is a key building block, which helped to ensure the momentum for migration. With the various timelines of the migration calendar brought in by the SEPA Regulation, the path for the long-term success of the SEPA harmonisation project has been laid out. Benefits of efficiencies and cost reductions for all users, including corporates, as well as increased competition are all expected to be realised over time.