Awareness of SEPA increases among SMEs, say ISME

2nd October 2013 | News

The number of small and medium-sized enterprises in Ireland aware of the Single Euro Payments Area (SEPA) has increased significantly since May, according to the Irish Small and Medium Enterprise Association’s (ISME) latest survey.
More than half (58 per cent) of Irish SMEs are now aware of the impact of SEPA on their organisation’s processes and systems; an increase from 27 per cent in May.
SEPA is an initiative of the European Commission as part of the European Union’s (EU) Lisbon Agenda to improve the efficiency of payments in Euros both cross-border and domestically.
As part of this new programme, new schemes for credit transfers and direct debits will be replacing existing payment schemes and existing payments will be migrated to the new schemes.
Despite the encouraging increase in overall SEPA awareness, ISME insists more has to be done with only two per cent of SMEs surveyed confirming they had been able to test their system with their banks.
Mark Fielding, chief executive of the ISME, said: "The history of Irish banks in how they deal with customers is appalling, with an attitude of 'bank profits first; customers later', in the context of SEPA, they have already let us down.
"It is now incumbent on the Central Bank to ensure that the banks change their ways and properly assist in the change-over to SEPA, through a separate system and proper testing."
An increase in national SEPA awareness has also been recommended through intensified advertising and promotion.
While ISME recognised the marked improvement in the readiness for change among small businesses, it called on the Government to intervene in the question of an ‘eight weeks no quibble refund clause’ in the implementation of SEPA.
The clause means that a payer of a Direct Debit may cancel it at any time within eight weeks of payment and the bank is obliged to refund the monies. The system was primarily designed to aid consumers, however, negligence from the Irish banks has led to the system being utilised for all transactions – including B2B – making it unfeasible for business.
"Once more the Irish banks have let us down in refusing to implement a Business to Business (B2B) SEPA system and by doing so, place extra costs on Irish Business," added Fielding.
"The Government, through the Central Bank, still has time to rectify this bank oversight, by insisting on a change for business banking. It is simply not good enough for the Irish banks to wash their hands of this problem, while SMEs struggle to manage."