SEPA Instruments Gaining Ground as End Date Looms

According to the gtnews 2011 Payments Survey, single euro payments area (SEPA)-related payments are gaining ground, within a global trend towards electronic payments (e-payments). Although they are still a minority of payments used on a regular basis, currently with 34% of respondents using SEPA Credit Transfers and 14% using SEPA Direct Debits (SDDs), both instruments are expected to grow in usage over the next three years: SCTs to 47% and SDDs to 34%. This may be as a result of the recent decision by European Commission (EC) to set the long-awaited end date for legacy domestic payment instruments: 1 February 2014.

Companies still lack a clear and agreed-upon understanding of the benefits SEPA can bring. It’s not a question if SEPA brings benefits – the real issue is how to calculate the benefits and align them with each company’s payments strategy.

The gtnews survey showed that the overarching trend is towards e-payments and away from cheques. Electronic payments (e-payments) are the vast majority used to make payments on a regular basis, given the large presence of wire transfers (87%). This is followed by cheques (62%), which are specific to some geographic areas, such as North America, Middle East and Asia-Pacific. The third and fourth placed most used payment methods are automated clearing house (ACH) credits (55%) and debits (47%), reinforcing the electronic nature of payment transactions today.

“When money must be sent fast, a bank wire transfer is often the best option,” says Enrico Camerinelli, contributing editor, gtnews. “In addition, payments made this way are more certain, as banks only send money if the sender has available funds. They are often used for important and high value transactions.”

The gtnews 2011 Payments Survey surveyed 312 corporate treasurers in October and November 2011.

Key findings include:

  • Treasury has a good control over payment initiation in 60% of the respondent population, which report that less than five business units can initiate payments independently.
  • The highest proportion of survey respondents (45%) reported that treasury only employs one or two technology systems to access and use payment information; only 7% report using 10 or more systems.
  • The use of SWIFT services for payment processes is not prevalent, although they have a small edge (52% report using SWIFT, while 48% do not). Fast-growing, emerging regions, such as Asia-Pacific, CEE and Middle East/Africa, are more actively adopting SWIFT.


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