Last year lawmakers finally settled on a deadline of February 2014 for the switch to a Sepa (Single euro area payment) system - designed to simplify and streamline processing operations for domestic and international payments - for Eurozone countries.

Sepa imposes a mandatory duty to switch existing payments applications and databases in favour of new schemes but, despite there being just twelve months until the deadline, businesses across the Eurozone are a long way behind, claims Experian.

The firm's research also shows that only 65% of Euro transactions are underpinned by fully accurate destination routing data and 12% of electronic payments made to and from businesses in Euros currently contain data errors.

It argues that businesses need to prioritise and accelerate their move to Sepa compliance before it is too late. Given the streamlining of the new data format under Sepa, full migration should involve a comprehensive validation process in order to ensure payments are successful.

If businesses fail to check the underlying banking data prior to migration to the Iban format, pre-existing errors inherent to the current system are likely to jeopardise future payments, warns Experian.

Businesses which currently use Iban-format account numbers have lower error rates - 4.6% - than those using domestic account numbers - 12.7%. Also, 45% of Sepa-compliant Ibans stored by large European businesses do not have the valid corresponding BICs required to enable successful routing of transactions.

With each failed transaction costing around EUR50, Experian claims that errors could potentially cost the industry EUR20 billion.

Jonathan Williams, director, payment strategy, Experian, says: "Migrating existing customer records to the Iban standard will be a huge challenge given the sheer number of accounts, and, as a result, large businesses face notable challenges to migrate and maintain Sepa-compliant mandate information in time for the 2014 deadline.

"Businesses must look to use, leverage and embed data validation within their systems and processes if they are not to incur significant costs as their operating countries move to Sepa, due to the error levels inherent in the data which the Sepa system is liable to expose."