SEPA Payment – International business and what it can do for you
There are several benefits that both businesses and individuals can get from engaging in international payments. The ability to harmonise both domestic and international payments is something both businesses and individuals have sought for a long time and that is why the EU introduced the Single Euro Payment Area (SEPA). It was once a daunting task for people to identify or know the right international payment method.
If you are looking for the most convenient way to collect and manage direct debits for your business, then you have most likely come across the SEPA. This piece will show what you need to know about the SEPA system and how SEPA XML Generator can help your business.
The basics of a SEPA Payment:
SEPA payments can be processed among members of the SEPA system which are found within Europe. In comparison to traditional financial payment methods, the SEPA transfer is cheaper & simpler both for financial institutions and your business. SEPA payments and transfers are processed between 24 and 72 hours internationally and usually much quicker domestically which is ideal for local and small businesses.
A SEPA Payment and The IBAN Number:
The guidelines of the Single Euro Payments Area received an update in August 2014. In the update, conducting a SEPA payment can only be possible using IBANs. This allows financial institutions to almost immediately identify where payments are from and where they are going to internationally. This is of course much simpler at the Domestic level where the BIC code is also utilised.
This helps in eliminating mistakes and speeding up payments and transfers. Both businesses and individuals can find their IBAN by contacting their financial institutions and on many financial documents. In most cases, you’ll see the IBAN displayed on your online banking system along with other information which includes:
- Check digits.
- International Bank Account Number (IBAN).
- Bank account number.
- Country identification code.
SEPA Payments and the customer
When you want a new or existing customer to sign up for a SEPA Direct Debit you should always lead with the benefits that it provides the customer. After all, you have already done most of the work by getting approved.
For example, by setting them up on a Direct debit they will no longer have to worry about the next payment deadline, they will not have to carry cash to your premises and even if they decide to go on holidays or forget a payment that is all covered. You and the bank have already taken care of everything.
This is an ideal situation for the customer especially if they have recurring payments such as a Gym or if they are paying off an existing debt for services already rendered. It provides both you and them with peace of mind so that is a win-win.
And if you are working internationally or plan to expand, the same system applies throughout and SEPA XML Generator is always here to provide you with the same great service both here and abroad.
Why you would consider a SEPA payment?
Now that we have talked about why SEPA payments are good for the customer, we must now discuss why they are good for you. Many of them are for the same reasons, there is less hassle when gathering payment, besides the initial set up process with your bank. There will be minimal paperwork and admin once customers sign up for the direct debit and everything is electronic making things easier to track and to process. International transactions will take less then 72 hours, which is great if you are dealing with suppliers and international customers etc.
The monitoring of payments coming in and going out is one of the best features of SEPA. The process includes invoice due dates, transfer status, improper payment, cancellations among a host of others, something which is much more difficult to track with cash. With a single click, you’ll be able to see all the date from your business and bank.
How to perform a Single Euro Payments Area Direct Debit
The process of getting permission from your bank to accept SEPA Direct Debits can be a little time-consuming at the start and we have discussed this process in an earlier article. Once this is complete you will then have to get written permission from your customers along with several bank details including their BIC and IBAN. When this is complete you can start accepting SEPA payments and Transfers.
This information will then have to be forwarded to your bank through a SEPA XML file which we will help you generate and walk you through the process of completing payment with your bank.
This completely removes the need for human intervention and the use of credit or debit cards. Your bank and that of your customers will handle the entire procedure of transaction in this scenario.
It’s crucial to know that only Euros will be in use when performing a SEPA direct debit. There will be a currency exchange if the financial institutions are not operating from the European zone. In this case, you can expect some extra charges as the transaction takes place.
You should always know that carrying out a SEPA direct debit doesn’t mean an immediate payment. In processing this kind of transfer, you can anticipate two working days, especially for a B2B scenario.
Summary:
The ability of anyone carrying out a SEPA payment is affected by their current level of transfer procedure and existing systems. It is at this point that our service comes into play. We help clients that take direct debits from their prospective customers to a financial institution. Our service will enable organizations, businesses, and individuals to create SEPA XML files without stress.
If you a start-up, small company, or entrepreneur looking to perform SEPA payments? SEPA XML Generator is up to the task to help you get things in the right perspective today. With our service, your business will continue to grow over time.