12 July 2013
A historical SEPA milestone for the Netherlands
The SEPA migration in the Netherlands has reached a historical milestone in the month of June, only eight months short of the deadline on February 1st, 2014. For the first time ever, more SEPA transactions were processed than traditional payment transactions. The total volume on June 20th was more than 5,5 million SEPA transactions and in excess of 5,2 million traditional payment transactions. This is something to be proud of, especially because of all the work that went into it. However, there is still a lot of work to complete to ensure that the Netherlands is fully prepared for a thorough transition to SEPA.
In a previous blog post, journalist Jelle Kamsma exposed that the Netherlands, Germany, Ireland, Italy, Austria and Slovakia have a lot of catching up to do when it came to SEPA Credit Transfer (SCT) payments. The percentage of SEPA transactions in these countries was 0 to 20 per cent in the second half of 2012. For SEPA Direct Debit (SDD) transactions, the percentage in the Netherlands was even lower. Although banks in the Netherlands are already prepared for SDD, not many of those transactions are happening yet. The expectation is that in the second half of 2013 SDD will be implemented throughout the market.
“At the beginning of this year, we were worst in class when it came to the migration of SCT,” said Bernard Juffermans, Program Manager at De Nederlandsche Bank (the Dutch central bank). “Now, we caught up very rapidly, thanks to the efforts of the National Forum SEPA Migration and our intensive campaign for the consumers and companies. I expect that come August, we will be ahead of the other countries that are catching up on SCT payments.” The reason for this lack of migration is very clear to him. “It was complete underestimation. Not just in the Netherlands, but in the other countries too. But our advantage is that the education campaign is paying off, people and organisations know now what they have to do to get ready for SEPA.”
Juffermans stresses that knowledge about migrating to SEPA is very important. “We expect that our payment structure will always works, just like the electricity or the water. But we have to bear in mind that the complete infrastructure is changing. Everything will change.” In the past year various organisations in the Netherlands already made a lot of effort to catch up. “The tipping point happened some time last spring. We had to do something to change the lack of commitment into a priority and with our education campaign we’ve accomplished that.”
These are not just words, Juffermans has the data to prove his point. The most recent statistics collected by the Dutch Central Bank’s SEPA monitor show that the Netherlands is busy preparing for SEPA. The bank conducted the research among 500 small and medium enterprises (SMEs) and 100 middle-sized companies. The survey was completed in April 2013 and showed that the percentage of organisations familiar with SEPA is stable, but that these organisations might actually have more knowledge about SEPA than three months before. The knowledge about the international bank account number (IBAN) has increased from 90 per cent to 96 per cent. The percentage of SMEs that has not started migrating decreased from 61 per cent to 53 per cent for SCT and from 75 per cent to 56 per cent for direct debits. It is fair to say that Dutch companies now have greater knowledge about SEPA and more companies started preparing for SEPA in the past year than ever before.
Another example of the migration progress in the Netherlands is the introduction of the IBAN-Acceptgiro. The Acceptgiro is a way to debit clients. The client lists his/her bank account number on the Acceptgiro (a paper document) and adds his/her signature. Once the signed Acceptgiro is sent to the bank, the amount will be debited within the following days from the client account and transferred to the merchant.
The IBAN-Acceptgiro, an adapted version of the current Acceptgiro, has been introduced on July 1st, 2013. The main difference between those two is the space for the account number. Instead of ten boxes there are now 18 boxes to fill in, which is enough space for the international bank account number. It is quite remarkable that the IBAN-Acceptgiro was introduced, because there was a lot of discussion in the market about whether or not the Acceptgiro should be retained as a payment product. This led to delays in the decision, but with seven months to go, the introduction is now right on time for consumers and companies to get used to the new approach.
“Getting used to new things isn’t always easy,” Juffermans states. He has more than 25 years of experience in management roles and is a specialist in managing changes. “Change can be very difficult for people on a personal level. Just imagine what it takes when a whole nation has to change.” Although it’s a big challenge, Juffermans has no reason to think that the country won’t be able to make the deadline on February 1st, 2014. “We’re going to make it. Absolutely. The Dutch Central Bank monitors the progress closely so we know what the current issues are. With the various parties being heavily involved, these problems can be fixed right on time.”
The first steps have been made, but later this year there will be even more challenges in the Netherlands. Companies will migrate to SCT and SDD, which will put a big pressure on different resources such as banks, IT departments and companies. Juffermans: “A lot of work still has to be done and there is definitely going to be a queue later this year when most organisations migrate.” Is that a bad thing? “Not when you’re prepared. It just means that you can’t migrate on the exact time you want to. Make an analysis of the impact, check your systems and prepare a fall back scenario. Don’t think that the banks will do all the work for you. Keep in control and you’ll be fine.”