SEPA, or Single Euro Payments Area, is a project promoted by European Central Bank and European Commission, aiming to standardize payment services in euro made by means other to cash (bank transfers, direct charges on current account and payment cards). SEPA area encompasses the 32 EU States, plus Iceland, Norway, Liechtenstein, Switzerland and Monaco, for a total of 513 million people and about 9,200 financial institutions. Within SEPA, citizens, companies, public administrations and other economic players will be able to make and receive payments in euro (other than cash) "both within national borders and among different countries, under the same conditions and with the same rights and obligations", according to a Bank of Italy notice.
Direct Debit (italian RID) is a payment mode that allows the automatic charge of money on client bank account. The bank automatically withdraws the amount of money for some kind of payments (such as installments, periodic payments, utilities charges, etc.. ).
SEPA will replace ordinary Direct charge on current account according to two distinct patterns: regular and fast Direct Debit will be replaced by SEPA Direct Debit (SDD) Core (basic ordinary service) and "B2B" (restricted to non-consumers), while domestic transfers will be replaced by SEPA Credit Transfer (SCT). Both of these tools will therefore allow you to execute euro direct debits and credit transfers within the SEPA area with the same rules for both domestic operations and for international operations within other countries in the area. In practice, all payments become "domestic", since there will no longer be difference between national and cross-border payments. There will not be any difference in which country or in which SEPA bank a client holds its own account.
Until July 31th, 2014, DD and national bank transfer services will be used as an alternative to the corresponding SEPA DD. Starting from August 1, 2014, national services will be permanently discontinued and replaced by SEPA services. Forthcoming transition to SEPA will not affect other payment services, including fixed amount standing orders and financial DD - whose replacement is scheduled for 2016 - bank receipts, payments by advice, bank or postal deposit slips, relevant amount and high priority fund transfers, other bank transfers that are not in Euro currency or are to and from countries outside SEPA.
By adapting to SEPA, euro payment transactions to another account will then be based on harmonized schemes, for tool characteristics, standards, infrastructure and costs. Conditions uniformity will create benefits to both customers and banks, streamlining operations and tuning payment services at a European level. This approach is expected to stimulate European trade, increase competition between payment services providers and, in this way, contribute to rate reduction, making payment services market more efficient, safe and convenient.
SEPA payment methods have new features impacting on many processes. Companies in particular can greatly rationalize treasury operations with consequent organizational and costs benefits. Using standardized formats companies will able to integrate payment process with the most advanced business procedures (such as e-invoicing). They will be able to more efficiently manage not only receipts and payments provisions, but also the related reporting and the connected reconciliation of accounting and commercial flows. By switching to SEPA debit, companies will have the responsibility to collect, dematerialize, preserve and exhibit (in case of disputes) debit mandates signed by debtors. Companies will as well be responsible to independently manage any mandate changes or cancellations requested by clients.
It is important to be prepared: companies are called upon to adapt informative systems, business processes, administrative procedures and, more generally, relations with banks, customers and suppliers. A critical step in this direction will be changing tracks format for communication between bank and enterprise, both for SDD and for SCT: the new international standard will become mandatory from 1 February 2016, but banks are required to accept it immediately.
As of now Mago.net aligns with these provisions thanks to SP7 improvements: tracks for bank transfers and DD are changed through the new service pack updates, with the possibility to timely agree to new provisions.
Move up thanks to Mago.net tools, made available in order to adapt your business to the next financial structure.
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