31 May 2013
The effects of SEPA exceed the eurozone
Anyone who thinks that the impact of SEPA is limited to eurozone, should think again. In fact, it is the surrounding countries who have intensive trade relationships with the eurozone who are welcoming the new international payment standard.
Organisations and consumers in countries like Poland, the Czech Republic and Hungary are already convinced of SEPA’s merits, according to Inge van Dijk, Head Product Management Payments at ING. SEPA allows them to transfer money to the eurozone faster and cheaper than is currently possible. Hungary for example is even using the XML standard to harmonise their domestic payment structure.
ING should know as the bank has subsidiaries in several countries outside the eurozone, including the Czech Republic, Hungary, Poland, Bulgaria, Romania, Ukraine and Russia. “There is a lot of trade between these countries and the eurozone”, according to Van Dijk. “We see that they are much more eager to embrace SEPA than most countries in the eurozone.”
After the introduction of the Euro in 2002, many adjacent countries started accepting it as an official currency. It looks as though SEPA, despite a challenging start, will have the same effect. According to Inge van Dijk, SEPA brings out the best of all the participating countries. “Poland, for example, has adopted the Dutch settlement rules which have been compiled by Equens. This means that companies are able to deliver transactions twice or three times per day and they will be processed the same day. I think it is safe to say that the harmonisation of the standard is resulting in improvements in the payment system across Europe — which is exactly what the European Commission had in mind with SEPA.”
Inge van Dijk: “I recently saw a striking example at our own helpdesk. A client called in the afternoon and asked if a credit transfer from Poland, which was made in the morning, had already been processed. Since Poland has embraced SEPA, Euro payments are settled several times a day. This means that Euro payments that are ordered before 11 AM will often be processed on the same day. This is a lot faster than the European requirement of one day.”
Harmonise domestic payments
Some countries even use SEPA as a standard to harmonise domestic payments. “Russia, for example, does not have a uniform payment system in place yet and they still do a lot manually. If they decide to move to a new standard, they will look at the latest standards in the market. SEPA harmonises much more than the eurozone; even America is interested in adopting XML.
ING receives a lot of questions from consumers and companies about SEPA. “You see people tend to go through the same levels of acceptation: it starts with denial, followed by anger, negotiating and finally everyone puts it into practice. Let’s be honest: for most people SEPA is something we have to do, its obligatory, without obvious benefits. Nevertheless we see that more and more people and organisations are getting ready. This does not mean that migration will be finished on time – especially testing the systems tends to be very time-consuming. If organisations decide to wait until the third or fourth quarter of this year before they start testing, they risk ending up in a SEPA traffic jam. That is really a major concern for us.
SEPA Get Ready
To help organisations prepare for SEPA, ING developed a dedicated website and the online training SEPA Get Ready, Because SEPA involves different levels within an organisation, the training is divided into several modules – ranging from basic to very detailed. The training was initially developed for internal purposes: “But when we showed it to one of our customers, he was very enthusiastic, so we decided to make the training available for external parties.”
Despite her concerns about slow implementation, Van Dijk increasingly sees positive examples of companies that see the opportunities offered by SEPA. “I recently talked to a Dutch entrepreneur who is doing business in Belgium, Germany and Switzerland. Because of SEPA, he is able to close three of his four bank accounts, and do all his banking via one bank account, saving him a lot of money. Another example of best practice is an organisation that lets holiday accommodation in nine European countries. They started using SEPA Direct Debit over a year ago, because it makes it much easier to collect money from nine different countries; with only one bank account and one payment standard.”