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A MAJOR CHANGE in how electronic transfers of credit take place across Europe is due to come into force on later this year, known as SEPA.
A date of 1 February was originally set for this, but has been pushed back until August as many companies are not ready to migrate. It will still be in operation, but compliance is not required until later this year.
You are likely to have heard or seen advertisements asking you if your business is ready for it, but not a huge amount about what consumers can expect. There are a few things they have to bare in mind, but nothing too complicated.
If you’re a little unclear about what SEPA, fear not, TheJournal.ie can explain.
Payment systems across the 28 EU Member States, along with Iceland, Lichtenstein, Monaco, Norway and Switzerland, will now be harmonised – hence the name, the Single Euro Payments Area.
This means that if you want to move money from, for example, a Republic of Ireland bank account to a French bank account, it will now be as easy as if both accounts were in the same country.
Previously, different processes applied.
I know what you’re thinking. “I can now easily pay the electricity bill for my holiday villa in Spain .”
Well aren’t you lucky? But yes. You can now setup a direct debit from your own ROI bank account, without having to setup a seperate one in Spain.
First thing’s first – you will need your IBAN.
Previously you would have been required to provide your six digit National Sort Code (NSC, something that looked like 92-12-34) and eight digit Basic Bank Account Number (BBAN) in order to receive payments.
More recently, you might have been asked to provide your International Banking Account Number (IBAN). This is what you will be asked for from now on – it will look something like IE64IRCE92050112345678.
This is a combination of your Sort Code and Account Number, with an extra two letters and two numbers, followed by another four letters, at the start. You will find it on recent bank statements, or alternatively the Irish Payment Services Organisation (IPSO) offer a secure online IBAN generator.
This is only for electronic payments. Your NSC and BBAN will still appear on any paper transactions, such as a cheque book.
You will need your IBAN if you’re signing up for a new direct debit. Everything else will be switched over automatically. Sit back and relax, alright?
B2B or not B2B, or B2C. What?
This means “Business to Business” or “Business to Consumer” Transfers, the first simply deals with direct debits between two businesses, but the second is what a consumer should be interested to hear more about.
Under this new form of “core transaction”, you are entitled to a complete refund of a direct debit for eight weeks after the payment is taken.
Of course you will still owe money to your phone company or electricity company or whoever it might have been, but it will be back in your own account.
Don’t own a business? That’s you off the hook.
You shouldn’t notice a change until the next time you enter a situation where you would usually be asked to provide your NSC or BBAN. Everything else should be handled by the banks and business who take direct debit payments or provide you with credit transfers, such as payroll.
What you will be able to do is setup direct debits from your account from companies in other countries.
Oh, you do own a business? Well then…
Businesses must ensure their employee payroll and any direct debits they might be subject to are switched over to SEPA, and that their accounting systems have been updated. This is more important for large companies, and who have been contacted by the Central Bank already to give them a heads-up that it might be tricky.
If they don’t switch over their systems, they simply won’t be able to make electronic transfers. Banks will no longer accept non-SEPA payments from within the 32 states using the system. They will also be breaching EU regulations.
And how will this change the day-to-day running of a business?
Any difficulties you’ve encounter when attempting to move money from one of the 33 states involved to another will no longer apply. It will be as if both parties are operating within Ireland.
Same as consumers, businesses can avail of some financial services offered by banks in other countries without having to open an account there.
This means that for companies who operate in more than one country, the can consolidate their banks. This means less fuss and less cost.
That wasn’t enough?
If you are looking to read about SEPA in more detail, have a look here:
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What’s a tracker mortgage?
you mean a tractor mortgage?
Does this mean that employers can now pay you into a bank account outside Ireland?
Ya they should be able to, all the SEPA transfers go through the EBA Clearing House and then get distributed to any bank in the countries involved.
It probably also means that a company outside of ireland can wrongfully or otherwise direct debit your account no questions asked.
This should have been done BEFORE the Euro came in to existence, not 13 years later.
Payed my wages from my business bank account to my personal account, both in the same bank. This used to be instantaneous. Now it seems it takes the best part of the day to transfer “because of the new process” I was told. Why the hell should it take so long even if new processes are in place? Its not going to a bunch of clerks in Brussels to run a rule over it is it? Why make a change that disimproves efficiency?
Unless of course all those millions of transactions and billions of euros are “resting” in some account earning interest for someone.
I shouldn’t be cynical but it’s a default when it cones to the banks and the EU
I transferred money from one BOI account to another both accounts in same branch. 3 working day
When I asked where was the money if its taken instantly from one account and in limbo for 3 days no one could explain
One girl at bank said most people don’t mind or notice the delay.
I can see a lot of complications when transferring funds that will go under the radar
Paid not payed
That’s Bank of Ireland’s fault, rather than SEPA’s. Bank of Ireland probably hold on to the money for a few days to earn a little bit of interest for themselves out of it. Worked for a company that used to do something similar when refunding customers. Was told in training not to tell the customers that we actually were not sending the money for another two working days.
I can transfer money from my bank account here in Sweden, to my Credit Union’s account with BOI, to make a loan repayment and it arrives with the CU the very next day. This is all thanks to SEPA. As well as that, it costs me nothing because I convert it from crowns to euro before sending it, as all euro transfers within the EU are now free because of this new system. Previously, I would have had to pay the equivalent of €12 for one international transfer every single month.
This is going to be confusing for the Scottish environmental protection agency
Someone told me that cheques will no longer exist. Is that true?
No
It is planned that cheques will be phased out by 2016
The banks never had any checks, hence the crisis……………
I said cheques not checks
did the dots at the end not give away the sarcasm……………..
The SEPA 8 week no quibble refund rule gives more rights to the customer and should assist the punter where there are disputes over a DD been collected incorrectly. If a DD is collected that you think shouldn’t then you can get a refund at your bank – no questions asked – without having the hassle of dealing with the accounts dept of the service provider. Obviously invoking it will trigger default letters and probably cancellation of that service so not a good idea to abuse it in the long run.
ANY change is welcome. I live in the UK. I was getting some final payments from my Irish employer. Now if I get an Irish cheque it can take a month to clear if I lodge it in my Lloyds account plus I have to fill out a detailed form. What I have to do is send it back by DHL (or Royal Mail if it’s a small amount) to my Bank of Ireland account in Oranmore. I sent a cheque by DHL on December 19th by DHL to arrive and be lodged by the 22nd. DHL guy mucked up, arriving when the bank was closed. I was home on the 23rd and by the 27th was wondering why my Laser Card was being refused. On the 30th I called in to the bank to find out what was going on. The cashier told me there was nothing she could do so I asked to see the manager. I was standing at the Customer Care Desk with the proof of posting when the DHL guy arrived behind me! Then (drum roll) the manager lodged it in the account of my old employer I had got the cheque from. Finally on the 3rd, the day before I returned to Britain, it arrived in my account.
The banks need to tell people that transactions will take a bit longer now, even between Irish banks. I work in payroll and we were inundated this payday with people ringing us because their money wasn’t in their account first thing. One of the banks even blamed us, telling customers that the delay must have been a payroll issue.
Avril, I think the banks are having people on with this. I’ve already said it above, so won’t repeat myself too much, but if I can transfer money from here in Sweden to an account in Ireland in one working day (and it’s not an express transfer), then why the hell can the Irish banks not send money to each other in the same (or less) time? They really and truly are an absolute joke and riddled with lies and corruption.
What you say sounds typical of the banks – fob the customer off by blaming someone else.
Here in Spain its been a bit of a nightmare with all the banks being merged that the old account number is obsolete or the bank number/branch number does not exist anymore, I would imagine its the same back home in the wet sod,
I wonder does it also mean Brussels can steal your money at a whim to recapitalise useless bankers.
That is probably a little further in the future, following the merger of all the European banks into one.
have your say