The migration to the Single Euro Payments Area (SEPA) could cost
businesses up to EUR20bn (USD25.88bn), according to a report by the
data and analytics provider Experian.
According to the new Experian report, the transition of national
credit transfers and direct debits to SEPA – the deadline for which
is set for February 2014 – will expose “out-of-date account data
and other errors that were previously overcome through a patchwork
of locally implemented fixes”. This may lead to transaction
failures, and cost businesses up to EUR50 per failed transaction,
for a total of EUR20bn per year.
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The Experian report analysed 650,000 bank account details and
220,000 IBAN (International Bank Account Numbers) records provided
by European businesses. It concluded that 45% of IBAN stored by
large European businesses lack a correspondent Bank Identifier Code
(BIC), necessary to complete transactions after the migration to
the SEPA platform.
Jonathan Williams, director of payment strategy at
Experian said: “While SEPA will undoubtedly benefit
organisations trading in Euros, errors in bank account details held
by European businesses risk causing significant teething problems
as locally implemented fixes – which have largely worked so far –
are made redundant by the new common payments system.”
Williams urged European businesses to fix existing errors before
the introduction of the new regulatory system. “Early adoption is
crucial. If left to the last minute, the SEPA requirements have the
potential to be both disruptive and costly,” he said.
European Payments Council chair Javier Santamaría replied
to the Experia report saying: “Costs resulting from
out-of-date account data are not related to SEPA payment schemes
and technical standards or to the migration to SEPA”.
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By GlobalDataSantamaria stressed that maintaining quality data is an
important objective of any organisation in every
context.
“Early movers on the demand side who have successfully
completed migration to SEPA Credit Transfer and SEPA Direct Debit
recognised that the conversion of customer account data to the
International Bank Number (IBAN) and the Business Identifier Code
(BIC) is one of the main challenges in the SEPA migration
process.
The migration process offers an opportunity to update
databases and should therefore support solving any issue related to
out-of-date account data. The experience of SEPA practitioners also
demonstrates that migration to the SEPA payment schemes is
manageable, feasible and that benefits exceed the efforts and
resources to get there.
According to the SEPA Indicators compiled by the European
Central Bank, some 176m SEPA Credit Transfer transactions were
processed in the Euro area in July 2012. We are not aware of any
problems related to legacy account data which would have impacted
the processing of these SEPA transactions,” he
concluded.
