One in five European businesses (21%) issuing debits is unaware of Single Euro Payments Area (SEPA) direct debits, finds a study from Steria, a leading provider of IT-enabled business services, prepared in collaboration with international Strategy consulting firm Edgar, Dunn & Company (EDC). The report, based on an extensive survey of 300 businesses with 250 to 5,000 employees in France, Germany and the UK, shows that, organisations risk missing out on the benefits of migrating.
SEPA affects the vast majority of EU businesses with all organisations using credit transfers or direct debits in Euros needing to migrate by February 2014. Shockingly, just a third of organisations (31%) has migrated or is in the process of migrating to SEPA Direct Debit (42% in Germany, 35% in France and only 3% in the UK).
30% of French and German businesses and more than 60% in the UK have not started to work on migration to SEPA at all. The remaining organisations are only assessing the project of migrating.
Despite this, more than half of European businesses (54%) agree that the SEPA Direct Debit scheme will generate more benefits than disadvantages to organisations. SEPA is an opportunity for businesses to plan ahead, redesign cash management systems and processes and generate synergies between business units – a key benefit in today’s economy. But, to reap these benefits, it is vital that organisations plan thoroughly and migrate properly.
The study found that a quarter of European businesses are considering working with external payment partners to help them to migrate adequately. Migrating could be a mammoth task for unprepared organisations, given the limited time left before the new legislation comes into force.
Jean-François Mansart, Head of the Group Advanced Payments practice, explains “Organisations that view SEPA as merely a compliance burden are missing a trick. Smart companies will take SEPA as an opportunity to optimise their cash management systems and processes and reduce fraud and bad debt. But they need to allow themselves adequate time to prepare to avoid potentially costly errors and to ensure that the benefits outweigh the costs of migrating."