SEPA Migration Checklist

 

Dear client, 

 

Single Euro Payments Area (SEPA) standards become mandatory across 17 Euro member states on 1 February 2014.  If your organisation initiates Euro ACH payment or direct debits, action needs to be taken to ensure compliance.  This email series is intended to provide you with relevant information and practical guidance. 

 

 

How do I convert legacy account data to IBAN & BIC?   

  

Requirement -  Since SEPA’s inception, a key requirement to enable processing of SEPA Credit Transfers and SEPA Direct Debits has been the provision of both the IBAN (International Bank Account Number) and BIC (Bank Identifier Code), for each payment. The IBAN is the account number of the recipient and the BIC being the identifier of the bank. Thus your organisation will need to obtain IBAN and BIC information for vendors, suppliers, employees and potentially other third parties to whom you make payments. Similarly where you initiate direct debits, you will need to obtain the same for your customers.

 

Identify accounts in scope – Identifying the systems where your organisation currently holds legacy account data is an important step.  You will likely wish to extract legacy account data in order to convert this data into IBAN and BIC format.  At this point, you should consider your vendor master database(s) and other relevant systems - for example,  your employee payroll information or your customer refund information may be stored in separate systems.  It is advisable to gather legacy account data for vendors, employees and customers together in order to make your conversion exercise a one-time effort.  Given that an IBAN can contain 30+ characters, also consider technical updates to these systems that may be required to hold IBAN and BIC information in the future.

 

Obtaining IBAN & BIC – There are a number of ways to obtain this information. Firstly, you can directly approach your counterparties and ask them to provide this information. You should closely track response rates and the quality of the information provided. Many clients, particularly those with high volumes of payment beneficiaries and direct debit customers, find that this approach is time and resource consuming.  Another option is to utilise local conversion databases that are available in some SEPA countries, however for organisations with pan SEPA payment and collections flows, this can be a cumbersome exercise to segregate information and interact with multiple conversion systems. 

 

A widely used approach is to utilise the services of specialist providers who can deliver the required IBAN/BIC data elements for SEPA.  Citi is working with an industry-leading information services company that can perform these enrichment and data conversion services on your existing payment information in a fast, efficient manner.   This provider can convert legacy account data for all SEPA countries and will validate your existing account data, thus helping to limit rejections and support higher STP rates.   Please contact your Citi representative if you need more information on this service.

 

Recent Legislation – As part of the regulation that set 1 February 2014 as the SEPA migration date for Euro member states,  it was announced that, in future, the provision of BIC information in SEPA payments instructions should be optional.  This change is primarily to facilitate domestic consumer payments and the industry is in discussion to facilitate this change. Note that the provision of the BIC is currently a practical requirement to process SEPA payments and corporates with more complex payment requirements should continue to collect and provide both BIC and IBAN. 

 

 

SEPA has the ability to deliver real value to your organization. Citi is committed to delivering solutions that enable you to capitalise on the benefits that SEPA offers.   

To put our expertise to work for you today, please contact your Citi representative or visit our SEPA website at www.transactionservices.citi.com/SEPA 

  

We have an upcoming SEPA webinar in March – to register your attendance visit: https://www.citibank.com/transactionservices/home/about/online_academy/form.jsp 

 

14th March 2013 at 3pm GMT 

  

  

 

Regards,

  

Citi Transaction Services

 

www.transactionservices.citi.com

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