Bank Technology News  |  October, 2009

By John Adams

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Bank of America Merrill Lynch and JP Morgan Chase have both claimed to be ready for the launch of SEPA Direct Debits (SSD) this week, enabling clients to access enhanced and standardized receivables management across 32 countries in Europe.

Part of the overall Single Euro Payment Area (SEPA), SSD is designed to enable the cross-border collection and payment of Euro direct debit transactions under a consolidated set of rules and processes.

While SSD’s initial availability commences this week, banks are expected to start offering SDD to their customers by 2010, and after a short transitional phase in which SDD with co-exist with domestic debiting processes, it’s expected to be standard throughout Europe by November 2010. The hope is that bank clients can benefit from standardized charges and transaction cycle times and other efficiencies inherent from replacing 32 sets of rules and processes with one. At the same time, banks can benefit from increased debit volume and revenue.

SDD will be a major change, particularly from an IT infrastructure perspective, for both European banks and American banks that do business in Europe, since there’s traditionally been wide differences in direct debiting processing among nations. That includes message formats, bank account number standards, the flow of mandates, verifying mandate procedure, timeline and chronology of collections and timeframes for returns and refunds.

Rival JP Morgan has also said its treasury services are expected to be ready for SDD on November 2, saying its clients can domicile accounts in any of its European branches, with transaction activity monitored via the bank’s ACCESSM online tool.

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