In 12 months’ time, we will reach a major milestone in the journey towards a harmonised European payments market. As of 1 February 2014, national payment products denominated in euros in most European countries will be replaced by the SEPA Credit Transfer and SEPA Direct Debit, and national clearing houses will be integrated into a pan-European clearing infrastructure; transferring a euro amount across the SEPA area will be the same as transferring the amount in-country.
This deadline applies not only to the payment industry, but also to organisations that exchange cashflow in euros and within Europe. Non-compliance implies potential delays in processing, unnecessary reparation costs and increased operating costs, with potentially serious cashflow consequences.
PwC surveyed its network on ‘SEPA readiness’. This SEPA Readiness Thermometer report evaluates the responses of 293 respondents that are deeply involved in the SEPA readiness projects of their organisations. The general impression that emerges from the analysis is that most organisations approach their SEPA readiness as a multi-territory and multi-disciplinary project. A less comforting impression is that many respondents have an incomplete understanding of, and underestimate, what being SEPA-ready entails.
The key findings that 55% of organisations are at risk of missing the February 2014 deadline, and that half of the respondents are not sure about their clients being able to comply, should sound some alarm bells with management.
We hope that snapshot of the current ‘state of play’ not only creates a sense of urgency, but also provides practical guidance to create the required focus, and to make SEPA readiness a priority for this year for organisations with business denominated in euros.
If you would like to discuss your company’s SEPA readiness efforts and determine how best to move forward to meet the 1 February 2014 deadline, please contact us.