Reducing costs and minimizing risks in transaction processing are issues of growing importance for companies. The trend towards standardization, automation and centralization thus continues unabated. An integrated payments landscape in Europe will help achieve these objectives in a number of ways.

A Standard pan-European Payment Format

Through the launch of the XML standard, SEPA will eliminate the current multitude of national payment formats. Companies doing business in several countries can thus significantly reduce their expenses related to format maintenance and system administration. Some banks such as Deutsche Bank are also offering to accept the XML format for all other global payment transactions, thus allowing companies to settle all global payments through a single format.

Standardization of Processes

Uniform settlement periods and exception processes (e.g. returns) for all European countries will significantly reduce current complexities. Additionally, the new EU Payment Services Directive will improve legal certainty in payments.

Possibilities for Process Optimization

Some new data elements have been introduced for SEPA with the aim of facilitating account reconciliation for companies. This includes, for example, a special originator reference and a standard length of the remittance information that banks will be required to pass on to the their clients.

Opportunity to Reduce Costs

Companies maintaining accounts abroad to handle local payments will be able to centralize such accounts and the associated liquidity. Current differences between domestic and international payments will be eliminated.