The impact of a single euro payments area for the public sector

J0179230024 Single euro payments area (SEPA)

Impact of the latest developments for the Public Sector

The EU Parliament has adopted a regulation mandating an end date for national payment schemes across Europe. Michael Concannon, Senior Manager – AIB Corporate Cash Management, assesses the impact of this development for the public sector.


The Single Euro Payments Area (SEPA) is an initiative of the European Banking industry supported by EU governments, the European Commission and the European Central Bank (ECB). Its core objective is to create a cohesive internal market for all electronic euro payments within the EU to promote greater transparency, uniform standards, lower costs and faster payments.

SEPA consists of the 27 European Union (EU) member states, Iceland, Liechtenstein, Norway, Switzerland and Monaco.


In February of this year, the European Parliament adopted a regulation mandating the closure of national euro payment schemes across the EU, in favour of schemes based on SEPA standards. The end date for completion of this part of the Regulation is 1 February 2014.

This change will impact anyone making or receiving euro payments in Ireland. Companies and public sector organisations will need to make changes to ERP/Accounts Payable/Receivable systems, interfaces to banking systems, as well as beneficiary and payroll bank data.

“The implementation of SEPA is the single largest change in our payments systems since the introduction of the euro” states Michael Concannon, Senior Manager in AIB’s Corporate Cash Management team, describing the impact of SEPA on customers.

Michael has been helping customers over the last 12 months deal with the changes brought about by SEPA. “A growing number of customers have migration plans in place and are fully aware of what needs to be done. For others this is something they are only starting to consider now. This is perfectly understandable, but companies with large payment volumes in particular need to start considering the impact of SEPA soon.”

Euro-Symbol-iStock_000014903335Medium BENEFITS OF SEPA

Although SEPA will present challenges, it will also offer many benefits to businesses and public sector organisations including:

• Simplified and standardised payments

The receiver’s bank and account details for payment transactions within Ireland will be in the same format as euro cross border payments i.e. SWIFT BIC and IBAN.

Organisations that utilise bulk payment initiation services will only have to produce one payment file for all euro payments within Europe instead of multiple file formats based on the specific national clearing system requirements of each country. AIB’s payment services also support emerging XML standards.

This will significantly reduce the costs that are currently associated with the maintenance of different national payment formats and related IT standards, including system administration.

• Faster payments

The standard execution cycle for euro credit transfer payments is faster. Traditionally, domestic and cross border payments in Europe took two to three days to complete. The standard payment cycle has been now been reduced to one day.

• Improved reconciliation services

SEPA payment standards support more detailed information that is designed to help the receiver identify who has paid them, and why. For example, you can include up to 140 characters of remittance information and additional originator and beneficiary reference information in new payment fields.

• Less complexity in payment processing

Companies only need to familiarise themselves with a single set of rules governing their euro credit transfers or euro direct debits across Europe. Standardised rejects and returns protocols will also reduce complexity and costs.

• Enhanced flexibility around payment collection

The ability to collect payments across Europe from a single account in AIB may open up new markets and business opportunities for some organisations. For example, companies who wish to offer services to pan-European customers that give rise to repetitive fees and charges can now offer these customers the ability to pay by SEPA direct debit.

• Evolution of e-solutions

It is expected that SEPA will have an impact far beyond payments and related government services. Looking ahead, it will assist the evolution of products such as e-invoicing, e-procurements,

e-payments, e-signatures and e-services in the areas of taxation, customs and social security.


Michael notes that a binding end date for completion of this initiative has accelerated the need for organisations to carry out a SEPA impact analysis. This will help to determine the tasks that will be required to maximise the benefits of SEPA and minimise disruption.

With less than two years to go, the planning and implementation of a SEPA Migration Plan is a reality for all businesses and public sector organisations. The duration, scale and complexity of this change will vary depending on an organisation’s payment and collections structure.


“AIB wants to be your SEPA partner bank and we believe that early engagement on this project will provide significant benefits to your organisation. We have dedicated SEPA experts within our Corporate Cash Management Team working on this project in collaboration with our customers. In particular, we are assisting companies who submit electronic payments (e.g. salary payments, creditor payments) or direct debit files, as format changes will be required to meet SEPA standards.”

AIB-Logo-4-col-pos CONTACT US

To assist you with the changes ahead, and to provide you with some practical steps that you can take to ensure a smooth transition, we have developed a ‘Navigating SEPA’ Guide. If you would like to receive a copy of the guide or would like to discuss any aspect of SEPA migration with us, please contact Michael Concannon by e-mail to or by phone at 00353 1 6417790.

Contact AIB’s SEPA Team


Tel: 00353 1 6417790


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