SEPA is short for Single Euro Payment Area – which is set up by the European Commission as a political agreement to reinforce the Economic Monetary Union. The goal is to form a single market for payment transactions within the European Economic Area. This will affect Microsoft Dynamics NAV customers that have banking relationships within Europe. With SEPA fully implemented all electronic payments in Euro within the SEPA area will be regarded as domestic payments – even if they are cross-border payments. One of the ways to implement SEPA is to create a set of standards for electronic payments using an ISO XML format together with a set of rules and guidelines as to how Euro payments must be handled.
On February first 2014 at the latest companies working with Direct Debits will need to make the switch to SEPA Direct Debits. One of the major changes besides a new format is that enterprises will need to have a signed approval or mandate to launch a SEPA Direct Debit. It’s assumed that 35% of the companies prefer to manage this workflow online and want to eliminate all paperwork.
NAV 2013 R2 will include enhanced Cash Management functionality (see previous blog post) with SEPA support, however in order to run efficiently the mandate process needs to be handled too, and that is not a part of the Microsoft Standard functionality. The good news are that the Microsoft Dynamics NAV add on solution Dime.eMandate offers this feature in close cooperation with Microsoft and Twikey. There are also partners in the Microsoft eco-system that are offering SEPA compliant payment solutions back to versions as old as version 3.60 all they way up to NAV 2013.
The Credit Transfer standard was initially used for interbank relationships with regards to cross boarder euro payments within the SEPA Countries. Banks that talk about SEPA compliant refer to this fact, meaning that they are able to create these kinds of transfers. It is important to note that right banks are only required to use this format when dealing with each other; it is not required that customers adhere to these standards in either customer-to-customer or customer-to-bank situations. It is also important to note that the SEPA only covers Euro transactions – not other currencies. Looking forward it is expected that national instruments for credit transfers, direct debits and cards are replaced by the relevant SEPA instruments and that customers will be able to use the standards for creating electronic payments.
Which countries are affected by SEPA?
These countries are affected by SEPA: Iceland, Norway, Liechtenstein, Switzerland, Monaco, and all 27 nations of the European Union: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom.
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