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Time to reap the benefits of SEPA

Time to reap the benefits of SEPA

Bas Peeters


28 July 2014

Time to reap the benefits of SEPA


Most corporates in recent years have focused on becoming SEPA compliant, and hardly invested in reaping the benefits SEPA can bring. This is partly caused by limitations within their own organisations. This is one of the conclusions in a recent whitepaper on SEPA. Equens and EY teamed up to investigate the needs and expectations of corporates with regard to payments. The resulting whitepaper makes clear that the promises of SEPA have not been fulfilled completely yet.

For most corporates, the implementation of SEPA has primarily been a compliance project. Given the current economic climate and the situation on the financial markets, it is understandable that they aimed to keep the migration project of a limited scale and manageable. However, this reduced the potential possibilities and benefits. As a result SEPA will, for the time being, remain a major investment with few benefits. The investment is currently only benefiting companies that have already consolidated their payment processes and treasury at the international level. 

Other corporates have already acknowledged that there are definitely benefits, but there are still a lot of steps to take until the full benefits can be reaped.The investigation showed that SEPA has three separate stages.

First stage: compliance

The first of these stages is that of compliance, which has almost been completed due to the deadline of August 1st. Corporates operating primarily in one country have invested extensive time and money in making sure they can maintain existing functionality where possible, but are now discovering that SEPA products are not always of the same standard as the existing functionalities. Furthermore, while far-reaching standardisation had been envisaged in connection with SEPA, it has emerged that there are still several minor differences between formats even within individual countries, which are difficult to deal with.

Second stage: improvement

The second stage – improve – now seems to be getting underway, and is all about taking advantage of the opportunities for improvement the SEPA standards can offer in terms of directly connecting payments with a broader range of financial functions, such as debtor management and financing. This has an added value, and elevates payments to a level where they are more than merely a commodity whose price needs to be as low as possible.

Third stage: enhancing the value chain

The third stage involves a radical increase in quality with benefits, which extends the payments value chain into the domain of the business (marketing, customer experience). In this area, the B2C segment is clearly in the lead, but there are also many possibilities for B2B.

The important thing for companies then is to stop viewing payments as pure processing that needs to be performed as efficiently as possible, as this turns payments into a commodity that needs to be as cheap as possible. Through the use of structured data and open standards, payments can also support the attainment of higher-quality processes and services, also in the B2B domain. In this respect, corporates are awaiting initiatives from their banks, and are – rather than viewing payments as a commodity – prepared to pay for added value. Despite the numerous reputation issues that have emerged recently, corporates continue to view banks as trusted partners, also for their payments.

Fulfill the promises

The initial steps have now been taken, and the biggest investments have been made. Provided the market will persevere, this investment can easily be recouped. This way, the promises of SEPA can be fulfilled, and subsequently used to help payments improve business and relationships with customers.

Read more about the three stages of SEPA in this whitepaper. This whitepaper further details and substantiates these visions of the future, supporting them with findings from a series of interviews with European corporates.