Perhaps you manage a Belgian parts manufacturer doing business with a German automotive giant. Or you’re a graphic designer working in your spare bedroom studio in Italy, with a French advertising agency client. Or you’re a journalist currently based in Iceland, but you do your banking in your home country of Norway.
It makes no difference. Regardless of the size or type of your company, you can now smoothly handle the back-and-forth financial transactions involved in doing business across the Eurozone (and even beyond) with cloud-based access to one secure, efficient, and cost-effective electronic payment system.
It’s called the Single Euro Payments Area (SEPA), and it’s now fully in operation over a vast network of European nations.
Welcome to the SEPA Zone
Since adoption of the euro by the Eurozone nations, the common currency made cross-border cash payments within the zone easy. But electronic payments from one individual or company to an entity in another nation in the zone was still difficult. Even bank-to-bank transfers could take considerable time, hefty fees were often involved and there was little transparency or assurance of payment.
Also, employees working cross-border couldn’t rely on their home banks for electronic payments, so they would often have to open new accounts in the country they were visiting. Compensation and expense payments were cumbersome and a general time waste.
All of those were reasons why SEPA was introduced.
The goal of the SEPA electronic payment integration initiative has always been to make all electronic payment options— credit card, debit card, bank transfer and direct debit—smooth and seamless across the Eurozone and other participating nations. As a business owner with new technology, you can now be confident of being able to make and accept payments with a few clicks and know that your electronic transaction will process regardless of the location of the other party—as long as the company or individual is in the vast SEPA acceptance zone.
In August of 2014, the system went fully into effect across all Eurozone nations, and as of October 31, 2016, non-Eurozone participating nations could begin using SEPA only to collect (not pay) payments of euro denominations.
Today, the system provides safe, easy and convenient electronic payment solutions for some 500 million people and 20 million businesses in more than 30 nations. If you haven’t already, it’s time for your business to explore the multiple opportunities this dynamic new technology delivers.
The SEPA Map
Here’s how the Single Euro Payments Area breaks down geographically.
- The 28 current member countries of the European Union, including the 19 Eurozone nations and the nine non-Euro nations.
- The four member states of the European Free Trade Association, which are Iceland, Lichtenstein, Norway and Switzerland
- The small European non-member nations of Monaco, San Marino and Andorra
It should be noted that some euro nations, regions or properties of participating countries are not participating in SEPA at this time. This includes the following:
- Vatican City
- Kosovo
- Montenegro
- Northern Cyprus
- The Faroe Islands and Greenland
- Some overseas properties of France and the Netherlands, and the British Overseas Territories
SEPA Today and Tomorrow
SEPA transactions are usually free and the transaction closes by the next business day. But transactional speed will improve greatly by November 2017, when new technologies will enable real-time electronic transfer.
Another long-term advantage should be more bank competition and lower rates and fees for commercial and retail customers. That’s because before SEPA there were high-cost and low-cost banking nations. The relative lack of commerce competitors in some smaller nations gave banks little motivation to reduce costs. But now brick and mortar and online banks will compete cross borders, which can only be good news for the customer.
Of specific benefit to business owners, there will be much less wait time for payment from customers and an easy cloud-based payment solution for off-site employees and vendors throughout the Eurozone and beyond. There will be more transparency in the information you get from your bank and guaranteed payment once transactions are completed.
The bottom line is greater ease and simplification. You’ll have enhanced money management efficiencies since your company will be able to use a single bank of your choice—located anywhere in the SEPA zone—to conduct all your banking business.
Find out all you can about how to revolutionize SEPA payments via a streamlined single-access cloud-based payment portal. You’ll discover the many ways your smaller business can take full advantage.