SEPA was originally devised by regulators, primarily for the benefit of financial services consumers in the Eurozone. However, banks have had to bear the burden of the associated implementation costs, actually incurring transaction business losses in so
doing. Therefore, it is no big surprise that they postpone investment of resources on associated initiatives for as long as they can – with much of the market becoming compliant only shortly before the phase end-dates, mandated by legislation.
When this reluctance is added to the fact that some countries are already bound to the EBICS standard and are currently resisting the SEPA priority, we have a mixed bag of messages and loyalties as well as a divided front being presented to the businesses
that will ultimately be impacted by this legislation. Unfortunately, a move to rationalise SEPA and EBICS seems to be a long way off as EBICS-bound countries still have existing compliance commitments to their national regulatory bodies.
The implementation cycle perceived by the regulators, primarily the ECB, was that the banks would communicate detailed SEPA process changes to their customer base – particularly the corporates – but it has been no surprise that the banks have not really
made this a priority and as a result have left many businesses floundering for guidance.
There is an existing short-term risk for commercial consumers that persist in trading through the older, very-costly-to-maintain payments instruments such as cash and cheques as they are already being discouraged by high processing charges in many countries.
Banks are likely to continue to penalise these payment methods, possibly to ultimately price them out of the market and kill them off completely as a means of reducing their processing and clearing operating costs. These short term costs aside, the overall
costs for SEPA implementation have yet to be covered and continue to rise. Initiatives being considered by financial institutions to recoup these costs may include new tariffs, affecting both private and commercial consumers, for both national and international
credit transfers and direct debits. The impact of this on Eurozone businesses is still unclear and yet to be communicated.
There has never been any form of organised communication to the commercial economies of Europe, so it is probably true to say that for a long time many corporations believed that SEPA was another ‘banking thing’ that did not affect them, and perhaps a large
number of commercial organisations still believe this to be the case as they have not been educated otherwise! More worryingly, as SEPA not only applies to the Eurozone, but affects businesses globally that deal in this currency zone, the education process
has to extend way beyond the geographical boundaries that are so clearly drawn on paper.
There is no way at this stage to understand the exact impact, both commercial and financial, that SEPA implementation will have on a global level, but the role of communicating to the wider business community has been widely neglected by both the financial
community via the European Payments Council (EPC) and the European Commission via the Payments Services Directive (PSD). The resulting misunderstanding and/or complete ignorance of the importance of this legislation by the business community could prove detrimental
and costly to a system designed to simplify international trade and payment transactions.