Counting the hidden costs of SEPA migration

Jonathan Williams
Additional contact information
Jonathan Williams: Experian, UK

Journal of Payments Strategy & Systems, 2012, vol. 6, issue 3, 276-282

Abstract: The countdown is already under way and the clock is ticking towards the Single Euro Payments Area (SEPA) deadline, after the European Council formally adopted a regulation to switch euro payments from domestic clearing to pan-European systems by February 2014. But poor quality data is going to cost — and in a nutshell, a minimum of e22bn is being looked at. There are enormous critical challenges to conversion and validation of payments data, which are already riddled with significant errors. As a result, adoption of SEPA-compliant systems across the continent looks like a mammoth task if it is going to be completed in little more than 18 months’ time. But the longer it is delayed the more it is likely to cost. There should also be factored in a loss of reputation for institutions, client dissatisfaction and the impact on cash flow — and suddenly the full scale of the challenge resulting from late adoption takes shape. So why should it be done? Regardless of the ongoing preoccupation with the Eurozone crisis, sovereign debt in some member states and the impact of the bailouts, the need, desire, appetite and political will to switch to, and adopt SEPA as soon as possible continues to be very strong. Early and rapid adoption of SEPA also has enormous benefits and cost savings for any key players in the integrated payments market, as it enables banks to eliminate costs associated with running legacy systems alongside SEPA — on a Continental scale.

Keywords: SEPA; payments; IBAN; adoption; conversion; validation; European (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hstalks.com/article/3417/download/ (application/pdf)
https://hstalks.com/article/3417/ (text/html)
Requires a paid subscription for full access.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aza:jpss00:y:2012:v:6:i:3:p:276-282

Access Statistics for this article

More articles in Journal of Payments Strategy & Systems from Henry Stewart Publications
Bibliographic data for series maintained by Henry Stewart Talks ().