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What is SEPA?

Cashbook Migration Pack for SEPA Direct Debits (SDD)

The Single Euro Payments Area (SEPA) is the payments integration initiative of the European Union for simplification and harmonisation of bank transfers. As of March 2012, SEPA consists of the 27 EU Member States, plus the four members of the EFTA (Iceland, Liechtenstein, Norway and Switzerland) and a remaining country, Monaco.

S.E.P.A Format
The introduction of SEPA (Single Euro Payments Area) brings about one of the most significant changes in the European Monetary Union since the introduction of the Euro Currency. All companies operating within the SEPA region will now have to adapt their payment procedures to comply with the SEPA Format. SEPA is an initiative by the European Banking Industry to ensure that both domestic & foreign electronic payments across the entire Eurozone, use the same format, resulting in many advantages for companies operating in this region. Customers can now make cashless Euro payments to anyone in the Eurozone, using a single payment account and a single set of payment instructions. SEPA means transfers between bank accounts are fast, reliable and considerably more cost effective.

Prior to SEPA there were many different payment areas or ‘clearing systems’ within Europe. This resulted in cross border European payments being both expensive and disparate. The European Payments Council (EPC) has laid the groundwork for a more standardised payment infrastructure.

S.E.P.A Zone Members

  • The 17 members of the European Economic Area (EEA) and EU that are in the Eurozone.
  • The 10 members of the EEA and EU that are not part of the Eurozone.
  • The 3 members of the EEA that are not in the EU: Liechtenstein, Iceland and Norway.
  • Monaco – uses the Euro but is not an EU member country or part of the Eurozone.
  • Switzerland.
  • Other territories considered to be part of the EU and listed in Article 299 of The Treaty of Rome.

Cashbook’s S.E.P.A Solution

Cashbook offers companies a complete solution for SEPA compliance, now and into the future when payment protocols are updated. Cashbook has over 18 years of experience, dealing with over 165 banking formats throughout the world with over 200 Blue Chip/Fortune 500 clients. We are now at the forefront of the implementation of SEPA compliant payment formats for indigenous organisations throughout Europe and we look forward to assisting additional organisations with cost effective banking implementations from single site to shared service centre operations. Indeed, Cashbook’s electronic banking pedigree dates as far back as 1998 to a 60 site worldwide deal in the pharmaceutical sector, demonstrating the proven expertise that Cashbook has to offer in banking format/clearing house technology.

Features

Key Objectives:

The project’s aim is to improve the efficiency of cross border payments and turn the fragmented national markets for Euro payments into a single domestic one. SEPA will enable customers to make cashless Euro payments to anyone located anywhere in the area, using a single bank account and a single set of payment instruments. The project includes the development of common financial instruments, standards, procedures and infrastructure to enable economies of scale.
SEPA Deadline: 1st of February 2014


Since January 2008, SEPA credit transfers and direct debit transfers have been in operation. Euro States must migrate to the SEPA standards before the SEPA migration end-date of the 1st of February 2014 & Non Euro States for the 31st October 2016.
Which currencies are eligible for SEPA?

  • Euro currency transactions only.

Benefits

How your business will benefit from SEPA Direct Debits(SDD):

  • Lower transaction charges and only one euro account required by the biller for collecting funds across 32 SEPA Zone countries.
  • Facilitates the option of either a SDD Core scheme aimed at private individuals or SDD B2B Scheme available only to businesses.
  • Payers allowed a ‘no questions asked’ refund during eight weeks following the debiting of a payers account. In the event of unauthorised direct debits, the SDD Core scheme allows for a refund up to thirteen months.
  • Both SEPA Direct Debit schemes can be used for once off or recurrent direct debit collections. For the SDD Core Scheme, once off direct debit, the notice period is five days and for subsequent instructions the notice period is two days prior to the due date.
  • SEPA Direct Debits facilitate R-transactions whereby a number of different scenarios are catered for, including returns, refunds, reversals and rejections.
  • Users benefit from the PE-ACH (Pan European Automated Clearing House) which plays a pivotal role in the processing of incoming R-transactions.
  • Certainty is provided about the availability of money in the payee’s account.
  • Both SEPA Direct Debit schemes can be used for once off or reoccurring direct debit collections.
  • Businesses need the ability to store Direct Debit Mandate information to comply with regulations.

How your business will benefit from SEPA Bank Statement Automation:

  • Greater bank statement automation will reduce your company’s administration expenses.
  • Bank statement automation enables automatic bank reconciliation (>95% auto-reconciled data).
  • Facilitates automatic reconciliation of incoming payments with outstanding invoices based on the ISO Creditor Reference Standard (ISO 11649).
  • 140 characters of remittance information are delivered without alteration or omission from the payer to the payee to MT940 files or CAMT files which can be auto-uploaded and auto-matched.
  • Easy identification of a payment through specific data fields which clearly indicate payment types (i.e. salaries or taxes), facilitating auto-coding to specific ledger codes.

How your business will benefit from SEPA Credit Transfers (SCT):

  • A customer involved in a Credit Transfer payment can only be charged by their own payment service provider.
  • Facilitates lower transaction charges for payments across the SEPA Zone from a single Euro bank account.
  • 140 characters of remittance information are delivered without alteration or omission from the payer to the payee.
  • Easy identification of a payment through specific data fields which clearly indicate payment types (i.e. salaries or taxes).
  • Pre-agreed timeframes for delivering Credit Transfers provide certainty for cash collection.
  • Facilitates automatic reconciliation of incoming payments with outstanding invoices based on the ISO Creditor Reference Standard (ISO 11649).

The EPC believes that SEPA has a number of benefits including:

  • All banks offer the same type of product and adopt the same format.
  • Equal time limits, equal fraud-risk levels and equal processes across the Euro Zone.
  • Reduction of costs of electronic money and payment transfers.
  • The EPC has set out the rules, practices and standards around which banks must comply, requiring in future that all payments made between the ‘SEPA Zone’ countries are to be useusing the SEPA format.
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