Corporates in Europe require greater space for adding remittance data to the transaction messages they send through the region’s primary payments system, according to the European Association of Corporate Treasurers (EACT).
Alongside four leading trade groups, the organisation has written to managing body the European Payments Council (EPC) to highlight the shortcoming.
In the EACT’s view, the infrastructure of the Single Euro Payments Area (SEPA) – which the EPC oversees – is not currently adequate for conveying the full range of data that corporates need to attach to their payment transmissions.
As EACT chair Jean-Marc Servat and his co-signatories note: “Currently, SEPA schemes allow for a single occurrence of the remittance information field (either structured or unstructured), which is limited to 140 characters.
“We have argued for many years that this is insufficient for corporates’ needs, as it limits the possibilities for efficient payment reconciliation and reporting. This is especially true for business-to-business transactions.”
Demonstrating the strength of feeling on the issue, the letter’s co-signatories are high-profile business bodies the European eCommerce and Omni-Channel Trade Association, Ecommerce Europe, EuroCommerce and Union Européenne de l’Artisanat et des Petites et Moyennes Entreprises (aka the European Association of Craft, Small and Medium-sized Enterprises).
The letter goes on: “We would like to remind you that corporates need to receive remittance information directly from payment service providers (PSPs) using the existing interfaces in order to comply with accounting, fiscal, legal, internal and external auditing, subsidised financing auditing rules and procedures.
“Furthermore, competent authorities could require PSP-originated, or -confirmed, information to certify actual settlement of invoices/debit notes.
“It would also be very inefficient and costly to manage different IT systems for reconciling a single invoice payment using current SEPA formats and multiple invoice payments using external databases.”
When a corporate has wide relationships with its customers, the letter points out, that firm will issue several invoices and, eventually, credit notes.
It explains: “The customers will make payments for the net amount of the invoices and credit notes received in order to settle the credit notes and – in some cases, where bilateral commercial relationships are in place – its own invoices or debit notes.
“To allow automated reconciliation of the payment by the payee, the payer must provide adequate remittance information – for example, the creditor references, or other information about the invoices and credit notes that will be settled with the payment.
“The lack of space for sending the above mentioned references in the SEPA structured remittance information field obliges the payer to either send the remittance information by other means – for example, email – or include the details of invoices and credit notes in a text form in the unstructured remittance information of the payment.”
Neither of those alternative methods, the letter says, allow automated straight-through processing reconciliation by the payee. They may also entail additional and costly manual processes and interactions between payee and payer.
The signatories make the following requests of the EPC: