Ready Your SAP System for the New Payment Methods within the Single Euro Payments Area

  • by Juergen Weiss, SEPA-Now Consulting
  • October 26, 2011
By 2014 the Single Euro Payments Area (SEPA) is likely to become mandatory for all companies doing business in Europe. One of the most significant impacts is expected to be the decommissioning of domestic payment formats. Become familiar with the two new SEPA direct debit (SDD) payment methods being introduced with SEPA. Get detailed insight into the business processes associated with SDD and the necessary settings within SAP ERP Financials to activate the new payment formats. Understand the logical structure of the respective format trees within the Data Medium Exchange Engine (DMEE).
Key Concept
In December 2010, the European Commission proposed a new regulation to establish technical requirements for credit transfers and direct debits within the Single Euro Payments Area (SEPA). The new regulation calls for a mandatory migration date for the current domestic payment methods within the 32 SEPA member states by 2014 at the latest. This regulation forces all companies that are doing business with European partners and that are sending or collecting payments in Euros to comply with the new payment standards.
The SEPA credit transfer is described in my article “Ready Your SAP System for the New Payment Methods within the Single Euro Payments Area: Part I.” For another reference about SEPA, see my article “Prepare Your SAP Financials System for the Single Euro Payments Area.” For more detailed information about the Payment Medium Workbench and the Data Medium Exchange Engine, see my article “Payment Formats Unwieldy? Maintain Them with the Payment Medium Workbench.”

The Single Euro Payments Area (SEPA) is the result of actions taken by the banking industry in 2002, when the industry created the European Payments Council (EPC) to define the standards, frameworks, and rules for euro payments. SEPA applies to all national and cross-border euro payments within and between the 32 member states of the European Union (EU), the three European Economic Area countries, and Switzerland.

SEPA was originally launched in January 2008 with the introduction of the SEPA credit transfer payment instrument. In November 2009, the second phase started with the introduction of two SEPA direct debit (SDD) payment schemes — one for business-to-consumer (SEPA Core direct debit) and one for business-to-business (SEPA B2B direct debit) transactions. These new payment instruments are supposed to be identical across SEPA and provide significant payment efficiencies for the daily business of corporations. For example, exporters no longer require expensive, difficult-to-manage incoming payment accounts at foreign correspondence banks. Companies can set up payment factories and shared service centers for financial operations, enabling them to centralize their financial accounting, cash, and treasury management functions.

Juergen Weiss

Juergen Weiss works in the functional area of SAP Financial Supply Chain Management. As part of SAP’s product management team, he was globally responsible for the Financial Supply Chain Management applications, including Electronic Bill Presentment and Payment, Dispute Management, Collections Management, Credit Management, Treasury and Risk Management, Bank Relationship Management, and In-House Cash as well as Accounts Payable and Receivable.

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