If you are a business which trades across multiple countries, you know all too well how challenging the finances can become to manage effectively. Fortunately, there are third-party firms, which offer payment systems that utilise the SPEA technology that will significantly improve your efficiency in the global marketplace.
What is SEPA?
SEPA stands for the Single Europe Payments Area and what the law does, is it effectively makes any transfer or payment your company makes across a SEPA participant border to the equivalent of if you making a domestic transfer. SEPA Payments will help improve your payment processes and will enhance your cross-border business for more seamless transactions. In today’s world, you must actively work to compete in the global marketplace to have a profitable business, and SEPA payments is a great tool available.
How Will SEPA Increase Efficiency?
One of the major ways SEPA payments will help improve your business’ payment efficiencies is that you will only need one bank account to transfer funds across borders. Companies can perform all of their euro transactions out of one account which will substantially reduce fees that are currently paid to multiple banks around Europe.
In addition to saving money on multiple accounts, businesses save money on the per transfer fees which can add up over time and affect your bottom line. Before SEPA, for many businesses the cross-border transfer fees were a deterrent from doing business within other countries. With SEPA, the cross-border fees are significantly reduced, which is a cost saving that can be transferred to customers around the globe through reduced prices.
Also, the length of time it takes to transfer the funds across borders is dramatically reduced often from 4-5 days to less than 24 hours. In today’s world, customers are not used to waiting a few days to obtain the product or service they are looking for; in fact, most people expect to be able to receive the goods on the same day. If your business is not able to produce your goods or service in a short time frame, the customer will most likely move on to a competitor who has the capability.
When businesses can speed up the transfer of money and clients can get the product faster, the company will end up with satisfied customers.
The SEPA Payments system will also let you centralise your internal financing and treasury operations. Rather than having various departments operating in different countries trying to coordinate with the other departments, businesses can streamline into one department all the payments coming in and out of the various countries the business is operating in.
A key benefit that businesses have seen when switching to SEPA is that it gave them the opportunity to rework all of their current payment systems making the organisation more efficient in many areas. Anytime a business has the opportunity to streamline a process, it often unveils inefficiencies and waste in the current operating systems, leading to broader changes throughout the organisation. Switching to a SEPA Payment system is like a good spring cleaning!
One of the ways in which business can use SEPA and streamline their payment systems is by using a third-party provider who specialises in SEPA payments. SEPA does have a few requirements in order to qualify as a SEPA Payment, including using a particular IBAN as the account identifier and the standard message format. When you are dealing with a regulation, that requires compliance, it is often better and more efficient to go through a third-party SEPA payments provider.
These companies give you the peace of mind that payments will be in compliance with the SEPA regulations. Also, using a third party will reduce the errors in your payment system that can cost your customers as well as your business time and money working to correct the mistakes.
Finally, using a third party means you do not need to spend resources making sure you are up to date with changes in the regulation or new technology. This third party will take the guess work out of the SEPA payments leaving your resources to focus on revenue generating activities. A third-party payment system will help ensure your business remains competitive in the global marketplace for years to come.