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The Clock Is Ticking in the Race to SEPA Compliance

I’ve always been one who works well under pressure. Give me a deadline, and I seem to shift into high gear. The count-down begins, adrenaline kicks in, and my focus – while far from razor-sharp – is enough to get the job done before the clock strikes midnight on the due date.

Of course, my deadlines are relatively inconsequential compared to the one that banks are now facing across the European Union. By February 1, 2014, all EU banks – large and small alike — must comply with the Single Euro Payments Area (SEPA) initiative. SEPA is designed to make life easier for consumers, businesses, and governments by making cross-border payments, credit transfers, and direct debit transactions quick and safe. But it certainly isn’t making life easier for banks.

SEPA Compliance: It’s the Law

To comply with SEPA, all EU banks need to modify their IT landscapes to support the initiative’s standardized, unified payment scheme.  What’s more, they must complete these modifications within a few months to meet the fast-approaching deadline.

Failure to comply with SEPA by next February is the equivalent of breaking EU law. The repercussions are serious and potentially widespread. Any bank that has not transitioned to a SEPA-compliant platform  by the looming deadline will be unable to process domestic or cross-border transactions. The result? Lost business and credibility for the bank, along with significant disruption for its customers.

What Are the Options?

How can banks migrate efficiently and cost-effectively to a SEPA-compliant platform? An SAPinsider article by Kilja Ewering, global product owner of SAP Payment Engine, offers sound advice. Basically, banks have three options. They can:

  • Migrate SEPA payments to the current domestic platform – This may meet short-term SEPA challenges. But these in-house systems are typically difficult to change. And often they cannot cope with SEPA requirements for XML-based formats or direct debits.
  • Migrate SEPA payments to the current cross-border platform – This approach meets SEPA requirements, too. But it increases short-term costs and requires additional investments. Why? Most cross-border platforms cannot handle mass volumes of domestic payments. And if they do, most cannot support 100% straight-through processing needed to handle these volumes cost-effectively.
  • Create a SEPA-compliant platform – This approach provides a solution that scales to meet large volumes of domestic processing transactions. You can consolidate multiple domestic platforms step-by-step into a single SEPA-compliant platform. Plus, you can gain advanced cash-management functionality, increase transparency, and offer customers a more superior banking experience in the post-SEPA world.

Winning the Race Against Time

According to Ewering, today’s best-run banks are choosing option three and deploying a platform expressly designed to achieve SEPA compliance. For banks interested in this long-term solution, SAP offers the SAP Payment Engine solution (, which offers:

  • Central payments hub
  • Ability to set up flexible business rules
  • High scalability
  • Standardized interfaces
  • Management of the complete payment lifecycle

With SAP Payment Engine, you can transition more rapidly and cost-effectively to meet SEPA requirements – and handle the massive volumes of domestic and cross-border transactions on a proven, SEPA-compliant platform.

Learn More

If you’re looking for the optimal route to SEPA compliance, check out Ewering’s article entitled “Master the SEPA End-Date Regulation with SAP Payment Engine.” (

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