Firms face payments freeze if SEPA deadline is missed
COMPANIES have been warned that they have less than three weeks left to avoid a shutdown of their payments systems by ensuring they are compliant with the new single euro payments area (SEPA).
SEPA will be introduced on February 1 and will provide a common payment processing system across the EU.
Companies that have not upgraded their systems will find that credit transfers and direct debits will cease to function, meaning suppliers and staff cannot be paid and customers' payments will not be received.
A survey by the Irish Small and Medium Enterprises Association (ISME) last month showed that a mere 22pc of SMEs were SEPA compliant.
Financial software group Sentenial, which has been advising many European banks and corporations on the transition to SEPA, warned businesses that time is running out.
"Companies that do not get ready for SEPA won't be able to pay their staff or suppliers; it is as simple as that," said chief executive Sean Fitzgerald.
"However, it is certainly not too late to take action and hundreds of companies we are talking to started the new year with upgrading to SEPA compliance at the top of their to do list."
SEPA has been introduced on a phased basis across 33 countries since 2008 and has important consequences for how businesses process electronic funds, transfers and direct-debit payments.
From February 1, sort codes and account numbers will be replaced by an international account number (IBAN) and a bank identifier code (BIC).