15 March 2012

EPC: Get ready for SEPA by February 2014 – Early movers on the customer side share lessons learnt

This European Payments Council Blog highlights best practice identified by bank customers who have successfully completed migration to the Single Euro Payments Area (SEPA). Part II focuses on the transition to the International Bank Account Number (IBAN) and the Business Identifier Code (BIC).

The SEPA Regulation, specifically, states that a payee accepting credit transfers must communicate the IBAN of the account to which the payment should be credited and the BIC of its payment service provider (PSP), "but only where necessary", to its business partners. Likewise, a payer wishing to make a payment by direct debit must communicate the IBAN of the account which should be debited and the BIC of its PSP, "but only where necessary", to the payee. Recital (8) of the Regulation states that "in the vast majority of payment transactions in the Union, it is possible to identify a unique payment account using only IBAN without additionally specifying BIC". It would be helpful if the European legislator could clarify how payers and payees are supposed to determine whether the IBAN alone is sufficient to identify the particular payment account which should be credited or debited.

SEPA project managers representing corporate and public entities, who have shared their migration experience in the EPC Newsletter, stress the need for careful planning when preparing the transition to IBAN and BIC. They also highlight the importance of thorough testing prior to making the move in the live environment. It is also recommended that businesses and public administrations preparing for the conversion of account data to IBAN and BIC take the following steps:

• review invoicing and accounting procedures;
• identify and adapt all systems that operate on the basis of account numbers and bank codes;
• define standardised processes for cross-border payments to add missing IBAN and BIC codes;
• provide easily accessible information on IBAN and BIC to business partners and customers. This includes, for example, updating invoices, stationery and other documents used to communicate account information to others.

In addition, the EPC recommends that national banking communities provide centralised conversion services to their business customers. To obtain related information, businesses and public administrations should contact the appropriate bodies at national level. The European Central Bank (ECB) makes country-specific SEPA information, including SEPA-related contact links, available (see link to ‘ECB-SEPA-by-Country Hub' below).

Full article

ECB-SEPA-by Country Hub

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