20 December 2012
‘The UK is not prepared for SEPA’
The map in a previous blogpost showed that a lot of countries in Europe are doing well when it comes to the preparations for SEPA. Even for countries that are not in the SEPA-zone, the introduction of SEPA has its consequences when it comes to in- and export. The United Kingdom is such a country. The awareness of SEPA isn’t very high, but SEPA will affect the nation eventually. On the website of newswire Finextra an article was published about the progress in the UK.
Only 3 per cent of UK organisations have made preparations for the introduction of SEPA for direct debits in 2014. That’s the outcome the survey of 300 businesses in France, Germany and the UK, conducted by Edgar Dunn & Company on behalf of Steria. ‘In Europe almost 70 per cent of European businesses are aware of SEPA in general, and more than 80 per cent of businesses have heard about SEPA Direct Debit in France and Germany. However, only 26 per cent of British businesses are aware of the mandate.’
According to the survey only a third of the organisations have migrated or is in the process of migrating to SEPA Direct Debit. The number is a bit misleading, because in Germany it is 42 per cent, in France 35 per cent and in the UK it’s only 3 per cent. More than 60 per cent in the UK have not started to work on migration to SEPA at all, compared to the 30 per cent of French and German businesses.
In a Finextra Community blog on the topic, Neil Burton of Earthport, a regulated global financial services organisation specialising in cross-border payments, commented on the attitude of the businesses in the UK. “For non-euro countries including the UK, the end-date is 2016. That may sound reassuringly distant and makes it all too easy to put the SEPA file back on the shelf; however firms should not allow themselves to be lulled into a false sense of security”, he warned. “After all, how many UK firms hold euro accounts, or collect from customers in the eurozone? The outside chance of regulatory respite has passed – EC legislation takes far longer than a year. Breakup of the euro – extremely unlikely though that is – won’t stop it. SEPA is upon us, and we had better be ready.”
He warns that there is a lot to do for businesses and that time is short. “If by February 2014 a bank still has customers who haven’t migrated, the law says they must cease providing legacy payments services to them. That is not a conversation anyone is going to enjoy. And the banks didn’t ask for this; it shouldn’t be their sole responsibility to drive it to conclusion.”