With less than three months left before the Single Euro Payments Area (SEPA) deadline, the Central Bank of Europe says nearly 30% of the businesses that will be impacted from the changes to direct debit payments and electronic credit transfers have not completed preparations.
The SEPA payment is an initiative by the European Union that will change how the electronics payments that are euro dominated are processed across the participating countries, which will allow users of the payment services the opportunity to receive and make payments using technical standards and payment instruments that are common.
The initiative is intended to a create payment area that is borderless and more efficient. The gradual movement of the direct debit and credit transfer payments to the standards of SEPA has been taking place for a period of time, but will now become mandatory starting February 1, 2014.
However, the Central Bank has said that despite a deadline that is looming closer and closer that many of the impacted businesses have not yet scheduled their changeover with their financial institute.
The director of SEPA financial operations, Maurice McGuire said that impacted companies must act promptly to ensure they are online in advance for the migration end date for SEPA.
Failure to comply with the standards of SEPA will mean payments submitted to financial institutes after February 1, 2014 will be kicked back and payments will not be debited or collected, under the regulation set forth by the EU.
The European Central Bank announced that all businesses that are impacted that have yet to engage with their financial institutions and suppliers of software should now do so as urgently as possible.
All of the major banks have websites dedicated to SEPA and migration experts for SEPA are available to help with all questions or doubts that might arise.
Now with less than 90 days until the deadline, businesses are racing against the clock. If any problems occur in the transfer to the SEPA system, it could cause a delay in receiving and making payments, which could make it difficult for those businesses that rely on daily cash flow from electronic payments.