Q: What was the incentive for EDF to migrate part of its credit transfers to SEPA as soon as June 2008?
As chairman of the SEPA Commission of the French Association of Corporate Treasurers, we had to lead by example. In concrete terms, we made the decision to migrate all our credit transfers to suppliers and third parties to SEPA in light of a favourable context. Firstly, all these payments are already processed through a payments factory. Secondly, SEPA brings the prospect of benefits on cross-border transactions in euros (which stand for a considerable part of our international transfers). It completes the provisions of Regulation 2560/2001 and allows mutualising the adaptations with those required for domestic credit transfers.
Moreover, this migration also allows us to consider expanding the payments "on behalf of" to our European subsidiaries using the same standards and circuits as for France.
Q: How did you prepare for this migration?
Necessary adjustments of our payment factory were twofold:
- from the input side: transformation of the beneficiaries' account numbers provided by the application initiating the payment into BIC + IBAN using SWIFT's "BICPlusIBAN Directory"
- from the output side: use of XML standards as required for the SEPA Credit Transfer.
Of course, a test phase with the chosen banks for this start was necessary to check if the end-to-end process went well, in the two directions from client to bank and bank to client.
Q: In your opinion, what are the conditions needed to make SEPA a success?
It depends on the payment instrument considered. For the SEPA Credit Transfer, the migration does not require heavy organisational modifications; the adaptations do not impact the processes. On the contrary, the SEPA Direct Debit has a heavier impact on the organisation, because the management of the mandate is transferred to creditors.
To make the migration to SEPA a success, it is necessary to mobilise all actors concerned as soon as possible and to anticipate sufficiently the IT adaptations induced by the future phasing-out of legacy instruments.
That means we should prepare ourselves from now on to implement the SEPA Direct Debit in order to be sure to meet the timeframe. That supposes to clarify a certain number of matters, such as the functionalities of the "e-mandate", the impact of the Payment Services Directive’s transposition, the business model. Corporates expect a significant price-cut. Anyhow, they will have big difficulties to accept the project without knowing the return on investment, especially in the current economic context.