It is exactly one year until all electronic payments in the Eurozone require full SEPA compliance and only 30% of credit transfers and 2% of direct debits have been migrated to the new standards, research from Experian has revealed.
The report, estimates that the failure to address the problems surrounding adoption – by February 2014 – could cost the Eurozone up to EUR20bn (USD27bn). It also revealed that businesses that had adopted the SEPA-compliant International Bank Account Numbers (IBAN) had significantly reduced error rates in comparison to those using domestic account numbers.
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However, nearly half of SEPA-compliant IBANs stored by large European businesses did not have a valid corresponding Bank Identifier Codes (BICs), which is required to successfully route transactions.
Jonathan Williams, Experian director of payment strategy said: "Migrating existing customer records to the IBAN standard will be a huge challenge, given the sheer number of accounts and, as a result, large businesses face notable challenges to migrate and maintain SEPA-compliant mandate information in time for the 2014 deadline. Businesses must look to use, leverage and embed data validation within their systems and processes if they are not to incur significant costs as their operating countries move to SEPA, due to the error levels inherent in the data which the SEPA system is liable to expose."
Warnings have been consistent about the readiness businesses have for compliance. In October Experian presented research suggesting that the lack of SEPA compliance could prove costly.
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By GlobalDataEUR20bn potential loss with SEPA transition
One in five European businesses unaware of SEPA Direct Debit
