Reports that companies are ready with SEPA migration plans but taking deadline too lightly.
Companies plan on waiting far too long to implement their Single Euro Payment Area strategies, according to a report from the European Central Bank. What’s more, awareness of SEPA among local government is “still fragmented and the level of preparedness is rather poor.”
With just a little more than 300 days until the SEPA migration, deadline (February 2014), many companies have been slow to focus on the issue. The project is intended to harmonize the way companies make and process retail payments in euro.
The ECB’s report, released March 21 and its first on SEPA migration, shows that most corporations have finished the planning phase of SEPA and are aware of what it will mean for them; but the endgame is still uncertain for them. “[W]hen it comes to the actual implementation, a number of companies have adopted very late internal deadlines, even as far as to the end of 2013,” the ECB said. “Late migration is highly undesirable in projects like SEPA, where many technical details need to be reflected in end-users’ back-office systems and internal processes.”
The ECB added that it is possible that in some cases, “companies could even face the risk of some level of disruption in their handling of payment orders.” This is something treasurers were certainly not want to contend with when doing their cash-flow forecasting.
Hot Topic.
Perhaps because of lots of broadcasting by banks, who are mostly prepared for the transition, SEPA migration is beginning to show up the radar screens of US MNCs. At a recent NeuGroup Global Cash and Banking Group meeting, SEPA was a hot topic. At least two members are fully prepared and another half dozen are less than 50 percent prepared. The rest of the group are somewhere in between. Still many were surprised at how much actually had to be done prior to the February 2014 date – it’s much more than just a BIC code and IBAN update.
Members were glad to hear that many banks are putting together programs to help MNCs meet the deadline, and many were interested in this as a stop gap to meet the deadline.