Payments UK simplifies cross-border SEPA payments into UK
Payments UK has developed a directory to offer UK institutions some of the benefits of SEPA despite the regulation not applying within the country until October.
From 1 February, Eurozone banks and Payment Service Providers (PSPs) can process Single Euro Payments Area (SEPA) payments using only a customer’s IBAN (International Bank Account Number). Previously customers were required to also provide the Business Identifier Code (BIC) of the PSP they were intending to pay, in order for their PSP to process the payment.
As the UK is not a Eurozone country, the regulation will not apply to UK PSPs until 31 October 2016. However, UK customers, particularly businesses that tend to be the recipients of these payments, will be required to give less information to the payer overseas if they want to receive a SEPA payment from someone in a Eurozone country.
This has been enabled by trade body Payments UK which has developed a SEPA IBAN-Only (SEPAIO) directory after liaising with the Financial Conduct Authority (FCA) and the Bank of England, during a two-year industry-wide project. The directory was developed and built through SWIFT’s SWIFTRef reference data platform. The directory provides PSPs with a utility for deriving the BIC from the IBAN. This is to ensure the change is smooth and seamless for recipients of SEPA payments in the UK, and to make certain that all Eurozone banks and large corporates initiating payments that qualify as PSPs have the necessary information to route a SEPA payment correctly to UK beneficiaries.
The directory can either be downloaded, integrated for access via an API via login to swift.com into the end user’s back office systems to support straight-through-processing (STP), or accessed using the individual lookup facility, which is free to use from swift.com.
This change should also reduce the instances of payment errors, by encouraging more SEPA payments to be made electronically – through STP – minimising the need for manual intervention.
Reported by Dan Barnes
