SEPA is all about being sensible

From a corporate point of view isn’t SEPA all about being sensible?

As usual I find myself jet lagged and awake at 2am following another SIBOS and I look back at all the topics I have been involved with over the years and it suddenly struck me. For the most part SEPA is simply about better housekeeping. Now that I am fully awake I am convinced that SEPA is all about being sensible and doing the things corporates should have done ages ago.

While there are some aspects of SEPA that are indeed new, the real benefits to the corporate are all about getting their house in order and this really has nothing to do with anything outside of their control.

So let’s look at this from the point of view of a European company called “Typical Corporation”.

Typical Corporation has a multitude of bank accounts in various currencies owned by various corporate structures resulting from acquisitions, legacy operations or for some reason lost in the annals of typical corporate history. This mess is usually further complicated by Typical’s ERP systems and the lack of political willingness within the company to sort this out and the fact that the next month end is just around the corner so as soon as that’s over they’ll tackle it.

So, with this background is SEPA a big deal to Typical Corporate?

No.

Wow, I said it and the world has not ended. The ground has not opened up. I have not received any notice of violation from any EU member state or national banking authority nor the European Payments Council. Well, maybe they already know this. So until I get my own house sorted out I don’t really get any benefit. I guess I better work harder. Right? Let’s see.

So let just say I am now Super Treasurer at “Super Corp” and have done everything I should have. I have worked 24/7 for the last 2 years and have one bank account per currency, have a payment hub and SWIFTNet connectivity, a great cash management bank and no social life whatsoever. SEPA is in full swing and the benefit I have accumulated because of SEPA over my hard work?

None.

Yep, zero, zilch, nadda. Ok, maybe a tiny bit at an outlying region that was hard to deal with before SEPA but overall nadda. Basically if you are already “Super Corp” sorted internally and have a great pan European cash management provider you are already sorted. In this scenario SEPA does not really add anything that is not available today.

So, why then all the SEPA fuss?

While SEPA might not be the panacea for most Corporates (pan European direct debits might prove beneficial if low volume) it is other areas that SEPA will remove significant existing barriers. Just as with the introduction of the Euro we will wonder why it wasn’t done earlier.