The vast majority of UK businesses breathed a sigh of relief at the turn of
the year when they found their recently upgraded BACS systems worked well.
Moving to internet-based BACSTEL-IP was a simple process for most companies,
while those that failed to plan the switch went through a more traumatic time
that forced some to outsource payroll and payment runs in the interim.
Yet the world of electronic payments is set to be turned upside down again
with the upcoming deadline set by the European Commission and European Central
Bank to create a unified payments system known as the Single European Payments
The scheme is part of the process to create a single European market, where
all euro-area credit transfer transactions will be processed over a set of
systems that allow priority same-day payments to be developed, facilitating
e-invoicing and automatic account reconciliation. By 2010 it is hoped that
business, local administrators and even individuals will use SEPA-based credit
transfers and direct debit transactions.
Local transaction systems will merge into three major players across Europe.
In the UK, the BACS system could potentially run a link to the European systems,
or another provider could offer a dual system for European transactions.
Adrian Stafford-Jones, MD of BACS software provider Albany, warned companies
that there would be ‘inevitable’ implementation costs for UK businesses.
‘The point of the scheme is good, to open up cross-border trade and reduce
barriers. The cost of transactions should drop as well,’ he said.
While large clients will see these benefits, smaller businesses could find it
more difficult to justify the cost of another transaction system.
Voca, which operates BACS, has appointed Erik Mansson as European director of
business development to enter talks with European banks over its ability to
offer all types of transactions, including those run through SEPA.
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