How to Streamline Business Payment Processes with SEPA
What is SEPA?
The Single Euro Payments Area, abbreviated as SEPA is a European initiative that standardises electronic payments in Euros. Its aim is to ensure efficient, safe and fast payments throughout Europe.
The Single Euro Payments Area is comprised of 34 nations, that is, all the 28 EU members along with Iceland, Liechtenstein, Monaco, Norway, San Marino and Switzerland. Intended to make a more grounded and aggressive EU commercial centre, SEPA will make certain payments much easier, faster and cheaper. These payments will include euros, direct debits, and card transactions.
An instant advantage of SEPA will be a lessening in bank charges for euro payments. It’s an extremely secure cloud based system that will significantly streamline your business.
What do organisations need when migrating to SEPA?
SEPA Credit Transfer and DD plans require the following:
- The use of the International Bank Account Number (IBAN)
- A Bank Identifier Code
- XML ISO 20022 standardised file arrangement
Management in the company should fully understand SEPAs implications on the company as a whole and the new procedures it may involve. It’s the management’s responsibility to inform employees on SEPA. Communicate how payment processes will change, what is needed to make that change and the overall results that it will achieve. That way, everyone will be prepared for the new process.
Impact of SEPA
Financing and money management is one of the most important aspects of any business. Along with this is keeping customers happy and relationships strong. If your payment processes are not modern and efficient, mistakes and delays will be more common and this will be highly impactful on your business. As your business grows, you’ll begin to reach a wider customer base, meaning you’ll have to accommodate their needs – this includes customers outside of your country. By using SEPA, you can guarantee euro payments will be made promptly and without hassle. This means that your European customers will remain satisfied.
Furthermore, all payments can be made from one central account meaning that visibility of what’s going on with business money is far clearer and management is at a higher standard. Typically, when dealing with European payments, you may have to set up multiple bank accounts in different areas. SEPA will prevent delays with making payments and will provide lower costs.
Extra bank charges will be non-existent with SEPA, so expenditure can be reduced and the money saved can be spent on more important areas of the business. As well as this, costs may be cut further as the banking market may increase in competitivity, potentially leading to lower prices.
SEPA can and should be implemented by any business, no matter what the size. If you’re making a significantly large amount of euro payments then you should definitely consider the change
Making the transition to SEPA may require a system upgrade, or a replacement system. You should contact a payments software provider who can take a look at your existing system and provide you with a quote for introducing SEPA into your business.
You should also ensure you meet all of the SEPA regulations as otherwise, you may not be able to implement the changes. However, if you’re unsure about this, your provider may be able to handle the migration process for you.
Increased revenue, reduced bank charges and quicker transfers are some of the benefits that SEPA implementation brings to business. As well as this, enhanced distinguishability and upgraded working capital management will have huge advantages.
Nonetheless, these advantages are only accomplished if organisations comprehend the ramifications of SEPA and the methods needed to migrate to it.
It can undoubtedly be said that SEPA represents the future of payment processes.