26|Retail News|July/August 2013|www.retailnews.ie
www.retailnews.ie|July/August 2013|Retail News|27
Retail News Interview
Retail News Interview electronic payments singly, who, for example, pay staff and creditors one at a time. For them, like consumers, the impact will be minimal, as payment details for individuals and companies will be automatically and seamlessly converted to BICs and IBANs by their bank.”
Are You SEPA Ready? John Rice, National Payments Programme-SEPA Programme Manager at the Central Bank of Ireland, advises on what FMCG companies need to do to prepare for the Single Euro Payments Area next February, and discusses the hugely controversial new Direct Debit regulations. FEBRUARY 1, 2014, will change the way electronic payments are made right across Europe, including Ireland. Are you ready for the Single Euro Payments Area (SEPA)? The SEPA area of 33 countries includes 28 EU member states, together with Iceland, Lichtenstein, Monaco, Norway and Switzerland. “SEPA is a single pan-European payment system, covering credit transfers and direct debits” explains John Rice, National Payments Programme-SEPA Programme Manager at the Central Bank of Ireland. “At the moment, each of the 33 countries who will participate in SEPA has their own electronic payment systems, built to their own specifications and standards. SEPA will build a common electronic
payment system across the 33 countries which will ultimately lead to more efficient, cost effective payments.” For the euro members of this area, the deadline for migration is February 1, 2014, with a deadline of October 2016 for non-euro countries. Simplifying Banking SEPA will essentially allow anybody, an individual or a company, to run all their payments, right across Europe, from one single bank account. So, for example, a multinational with accounts in numerous countries, will be able to consolidate into one single country and account for all credit transfers and direct debits. For consumers, a bank account in Ireland or any other country in SEPA will work just fine to
make or receive electronic payments right across the SEPA area. However, Rice points out, this particular SEPA regulation impacts online payments, direct debits and credit transfers, but not cheques or credit cards. So what do you have to do to prepare for SEPA? It depends on what type of company you are, essentially. Instead of your Irish bank account number and sort code, your bank account will now change to an IBAN (International Bank Account Number), while your sort code will be replaced by a BIC (Bank Identifier Code): both of these have been available on bank statements since 2008. “This is the only real change for the consumer,” Rice notes. “It is the same for small businesses who make
Bulk File Submitters The next level up in terms of complexity includes companies known as “bulk file submitters”, of which there are approximately 50,000 in Ireland. These are businesses that make a single payroll or creditor file: for example, they might have 25 or 500 staff but send a single file to their bank or pay multiple creditors in one file, Rice explains. For these companies, the first port of call is their existing software supplier. Depending on your supplier and the type of contract you have with them, they may upgrade all of your software to make it SEPA-ready, essentially converting your data (NSCs and account numbers), and creating a new file format, ISO XML 20022, which is the new SEPA standard. The next step is to contact your bank, let them know who your software provider is, inform them when you are upgrading to the new file formats and your bank will effectively plug you into the system. If, however, your software provider will not be ready in time for SEPA, your bank can be that third party software supplier, and will make your files
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Accountability ultimately lands with you to ensure your files are ready because your payments won’t be processed if they are not in the right format after February 1 next year. Don’t leave it to chance.
The introduction of the Single Euro Payments Area on February 1, 2014, will change the way electronic payments are made right across Europe.
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SEPA-ready. “At the moment, banks are not charging for this service, but they are incurring costs and they will probably look to recoup that over time,” Rice admits. “But you have to weigh it up against what a software provider would charge for the same service. In time, you will have to provide the new payment formats to your bank, so it makes sense to organise SEPA upgrades from your software as soon as is practical.” Rice advises every FMCG business, from the independent corner shop to the multinational distributor, the Cash & Carry to the multiple retailer, to act now. “Accountability ultimately lands with you to ensure your files are ready because your payments won’t be processed if they are not in the right format after February 1 next year,” he warns. “Don’t leave it to chance.” He advises business owners to shop around if their existing software provider and bank aren’t forthcoming. “You are free to look around because there are plenty of software providers and banks who are currently able to help you meet the requirements,” he says. New Direct Debit Regulations The most complex changes will occur for companies who are direct debit originators (i.e. their customers pay them by direct debit), according to Rice, who estimates that there are approximately 5,000 such companies in Ireland. Of