Among the most streamlining aspects of EU financial innovation is the Single European Payment Area, or SEPA—a system that allows for faster and more secure domestic and cross-border payments across Europe, including access to markets that use market-specific payment methods where cards may not be the preferred method of payment. With previous national systems becoming obsolete as of 2014, it is vital that your business become SEPA compliant to compete efficiently in the European market and maximise its cash management procedures.
The largest initiative of its kind to be implemented in Europe, SEPA includes all 28 European Union Member States, as well as Iceland, Liechtenstein, Norway, Switzerland, Monaco, and San Marino. SEPA simplifies the free flow of goods and services across the area, creating an integrated European market with a standardised set of terms and conditions that applies across the area to both domestic and cross-border transactions, greatly streamlining the process of making and receiving non-cash Euro payments for your business.
For businesses that operate internationally or domestically within SEPA, there are several advantages. SEPA allows businesses to standardise, simplify, and speed up payments with products like SEPA Credit Transfers and SEPA Instant Credit Transfers that allow your business to make non-urgent payments from a single euro account (domestic and international), and SEPA Direct Debit—which businesses can use to consolidate bank accounts and optimise European cash management structures. SEPA standards facilitate more efficient transactions, improved payment and reconciliation, and easier switching between banks, allowing businesses to maximise efficiency of payments and collections with just a single euro account.
One particularly useful tool employed by SEPA standards is the Danske Bank ISO 20022 XML file format, which allows businesses to make and collect European and Global payments using the same payments and collections files. This tool greatly streamlines capital management, exponentially benefitting organizations in areas such as:
It’s easy to see how getting SEPA compliant can benefit your business, but what does this mean in terms of growing pains for your organization? The specifics will, of course, be different for each business depending on its current practices, but getting compliant generally involves two major components:
If you are selling into or within the Euro-zone, and would like to enjoy the many SEPA benefits, SEPA payments are an opportunity for your business. The positive impact on cash flow and cash management arrangements is significant.
Transact24 offers extensive SEPA expertise and can help your business to: