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Huge number of Irish firms not ready for SEPA

The single euro payments area (SEPA) will be launched early next year.

Image: Black Credit Card via Shutterstock

MORE THAN 40 per cent of companies in Ireland have yet to start preparing for the introduction of the new single euro payments area (SEPA) next year.

An IBEC survey also showed that half of all Irish firms are unaware of the impact SEPA will have on their systems and processes.

Only about one in seven companies with fewer than 50 employees are currently ready for the February 2014 implementation, according to the research. Slightly more business owners have discussed SEPA with their banks and/or payments software provider.

Medium-sized firms with up to 249 employees are also ahead but only just. More than four in ten have not started preparations and only one in ten report that they are fully ready.

Twenty per cent of businesses with more than 250 employees report that they are ready for SEPA, while 28 per cent have failed to start preparations.

“Larger firms are clearly the best prepared,” explained senior economist Reetta Suonpera. “Smaller firms are less likely to have a specialist finance or accounting function, so it is not surprising that these companies report the lowest levels of SEPA awareness and readiness.”

SEPA is the next step towards completing the single European market, likened in importance to the euro changeover in 2002. The existing national payments systems will close on 31 January 2014. SEPA will then standardise electronic euro payments across Europe so people will be able to make and receive payments though direct debits or credit transfers between any European accounts.

It will come into force across 32 countries, including all EU Member States and Iceland, Lichtenstein, Monaco, Norway and Switzerland. To pay and collect electronic euro payments after that date, businesses will need to ensure that payroll, direct debit and accounting systems are SEPA ready.

Businesses have been urged to begin work on the changes immediately as necessary amendments to accounting systems may take several months.

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