Logica, a business and technology service company, has launched a mandate management product for corporates to enable them to take advantage of the new direct debit scheme introduced by the single euro payments area (SEPA). With Logica Mandate Management, corporates can improve cash flow, standardise collections, reduce cost and easily comply with the new regulatory requirements. Logica’s ‘pay-as-you-grow’ option means corporates can also keep upfront costs to a minimum and benefit from pricing that reflects usage.
SEPA Direct Debits (SDDs), introduced by the European Payments Council (EPC), will create a single direct debit payment scheme that will be used for euro collections across 32 countries. This will fundamentally alter the way in which corporates manage their collections. The European Commission (EC) is currently proposing 1Q13 as the switch-off date for domestic direct debit schemes in the eurozone.
Zilvinas Bareisis, senior analyst at Celent, said: “SDDs will allow corporates to further standardise payment collection processes, drive down costs and potentially have greater flexibility in their banking relationships. The enhanced consumer protection offered by SDD is likely to encourage greater acceptance of direct debit among customers. With direct debit, corporates enjoy greater certainty of collection dates and more automated reconciliations.”
Garry Young, director of corporate services for Logica’s global products business, said: “Firms with large numbers of retail customers across Europe – such as utility, telco and insurance companies – are likely to have millions of direct debit mandates. To handle new SDD messages, they will have to change business processes and systems. This will be a vast operational challenge. Logica Mandate Management is designed to make it easy for corporates to migrate to this new SEPA scheme without incurring high upfront costs. Most importantly it will help corporates better control their cash flow and boost payments efficiencies through greater centralisation.”
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