Only three percent of UK organisations have made preparations for the introduction of a Single Euro Payments Area (Sepa) for direct debits, lagging behind rivals in France and Germany as the countdown to the 2014 migration begins in earnest.
The survey of 300 businesses in France, Germany and the UK conducted by Edgar Dunn & Company on behalf of Steria, finds that almost 70% of European businesses are aware of Sepa in general, and more than 80% of businesses have heard about Sepa Direct Debit in France and Germany. However, only 26% of British businesses are aware of the mandate.
Just a third of organisations (31%) has migrated or is in the process of migrating to Sepa Direct Debit (42% in Germany, 35% in France and only three percent in the UK). More than 60% in the UK have not started to work on migration to Sepa at all, compared to 30% of French and German businesses.
All French businesses and a majority of German firms issuing direct debits (85%) claim that they will be Sepa-compliant on time for the end date.
The study also found that a quarter of European businesses are considering working with external payment partners to help them to migrate adequately.
Jean-François Mansart, head of Steria's advanced payment practice, comments: "Organisations that view Sepa as merely a compliance burden are missing a trick. Smart companies will take Sepa as an opportunity to optimise their cash management systems and processes and reduce fraud and bad debt. But they need to allow themselves adequate time to prepare to avoid potentially costly errors and to ensure that the benefits outweigh the costs of migrating."
Neil Burton of Earthport posted a Finextra Community blog on the topic last week, noting that for non-euro countries, the Sepa migration date is 2016. But that shouldn't allow British firms to be lulled into a false sense of security, he warned: "After all, how many UK firms hold Euro accounts, or collect from customers in the Eurozone? The outside chance of regulatory respite has passed - EC legislation takes far longer than a year. Breakup of the Euro - extremely unlikely though that is - won't stop it. Sepa is upon us, and we had better be ready."