Albany updates businesses on SEPA

Tuesday, 29 April 2008

Albany Software, the e-transactions software author, gathered together business managers for its recent seminar at Kings Weston House, Bristol, to discuss the most pressing developments for Faster Payments and SEPA (Single Euro Payments Area).

Faster Payments will enable same-day electronic payments within the UK, facilitating almost 'real-time' payments through a service similar to Bacstel-IP. SEPA, which was launched by the European Payments Council and the EU Commission in January 2008, has started to open up European financial borders, allowing cross-border payments to be conducted as easily as a domestic payment.

Faster Payments and SEPA are currently in the first stages of implementation but many businesses are still under-prepared for these initiatives, which are set to considerably reduce payment costs and transfer times.

Bob Larkham, Head of Payment Industry Relations at Albany Software, said, "In order to maximise the benefits of Faster Payments and SEPA, organisations should be developing new payment strategies with their banks and solutions suppliers to ensure adequate software is in place."

Larkham explained that Albany Software Bacs products will be upgraded or replaced with a brand new comprehensive and integrated solution which will be able to make both traditional 3-Day payments and same-day UK Faster Payments service. It will also allow businesses to format their SEPA payments prior to submitting them to their banks.

He continued: "The basic Bacs payment system will continue to underpin both initiatives and Albany's automated payments software will maximise the potential of this existing infrastructure. Our 12,000 UK clients will be able to upgrade seamlessly to whichever specification best suits the size and nature of their business. We will also be launching a brand new product (Albany ePAY) which will offer a complete solution to Faster Payments."

UK banks, CHAPS, VocaLink and Bacs are working together on the introduction of Faster Payments to reduce the credit transfer three-day cycle to just two hours. All payments submitted between 6am and 2pm will be processed before close of business on the same day, most occurring within two hours.

Mike Hutchinson, Bacs Head of Marketing explained: "Money and time savings to business will be vast, with the focus on cash management and profitability. In particular, businesses will now be able to really take advantage of any benefits to be gained from choosing between making either early or last minute payments."

In a measure to enable a managed roll-out of the service, transactions will initially be limited to £10,000 per item. Costs per credit transfer will vary between banks but will be pitched competitively somewhere between CHAPS and Bacs.

Harcus Copper, SEPA Product Manager for Barclays commented at the seminar that: "For those businesses starting to embrace SEPA, the cost savings are set to be equally dramatic. Currently, cross border payments cost around £29 per transaction. SEPA will reduce this to around £10, with further reductions possible for bulk transactions. These payments too are set to speed up with transactions aiming to take no more than 2 to 3 days".

Authentication of BIC and IBAN codes will become the biggest challenge for the success of SEPA and validation of this information at point of data entry is crucial as there will be penalties levied for incorrect information. Additionally, it will become even more important for businesses to check the UK Bank Sort Code and Account numbers before sending a same day payment. Authentication of BIC and IBANs plus the ISCD are already built into Albany's eVERIFY product.

Both SEPA and Faster Payments are respectively already, or will be, available for credit transfers only initially. SEPA Direct Debit facilities are planned to follow at a later date, likely to be at the end of 2009. The Bacstel-IP three-day processing service will still remain available for several years to come.

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