Having gone live with various SEPA file formats last year, we’re starting to see some complacency by those involved in SEPA implementations. After all, last year many of us were managing multiple SEPA payments and SEPA direct debit deployments across Europe – so doing one here and there at this time should be easy, right? Well – not quite. Having gone through the widespread and cross-organisational SEPA changes last year, we’re now in a business as usual environment. In this instance, you may not even know that a SEPA implementation is going in within your company and there may be a lack of understanding of the requirements by the immediate project team. As a result, they may fail to perform these 4 SEPA file format checks…
Please note this post focuses specifically on SEPA file format checks. SEPA file format checks are just one part of an implementation – check out SEPA Go Live – 4 Things You Need To Do TODAY! and 5 SEPA Credit Transfer Go Live Checks You Cannot Miss for details of other checks that should be performed.
These SEPA checks are basic, why would they be ignored…?
- We know SEPA, we’ve done it all before. Wrong. Each SEPA implementation is unique and you need to ensure you understand your system capabilities and bank requirements
- Within your organisation the project team may not fully understand SEPA and may think that an existing SEPA process and SEPA format with Bank A in Country X, can be copied completely and utilised with Bank B in Country X. Or worse still with a new bank in a new country. This is a bad assumption.
- Sometimes you may be working with consultants or a new SEPA file provider who may have some great experience, but they don’t know your company, your set up and your bank requirements
- The original SEPA project team has probably moved on, and now there maybe a lack of knowledge about SEPA and a lack of SEPA implementation experience
SEPA File Format Check 1 – Understand the SEPA File Format Specification
Ensure that the guy developing the SEPA File format has a copy of the target bank SEPA specification. I stress 2 points here because the person developing the SEPA file format maybe from another company, regardless of where the SEPA file is being creating the developer should have a copy of the SEPA file specification to hand and must ensure they understand the requirements.
As daft as it sounds, the SEPA file specification must be the target banks SEPA specification and not another banks SEPA specification. They may of course be different!
SEPA File Format Check 2 – Test the SEPA file with your Bank
If not already, get Treasury involved. Treasury will know who the relevant bank contacts are and can ensure that the project team is connected with the right people.
Once the target SEPA file has been developed, the file must be tested end to end. The resulting SEPA file must be sent to the bank and tested-verified through the banks back office systems. Ask the bank for their feedback on the submitted file and correct any encountered errors. You need the SEPA file to be given the thumbs up from your bank before you even think about going live.
SEPA File Format Check 3 – Communicate the Go Live Plan
Having developed and tested the SEPA file format with the bank and resolved any issues, you must share with all concerned parties the decision and date to go live. The concerned parties include:
- Any third party software or solution providers
- The users involved in generating the SEPA file format
- Any other teams or vendors that may be involved in the end to end process
- Treasury – so that they can highlight any errors, or work with the bank in case of any issues
- The target bank so they can support you on the go live date
SEPA File Format Check 4 – Perform a Live Penny Test
To verify that the set up that has been completely and successfully deployed to production, you should always submit a file containing a single low value SEPA payment or single low value SEPA direct debit instruction. Performing this Production Verification Test (PVT) or Production Penny Test (PPT) will help you confirm that each step and system involved in the process, right the way through to the bank, is ready and working as required.
Sometimes something may not quite work out first time, and by running a single and low value test – you’re able to fix the issue at hand without impacting multiple suppliers and / or customers.
Now because you have communicated the plan to the above parties already, if something isn’t working as expected, they will be ready to help you.
You’re good to Go Live…!
You’re probably thinking these are no-brainers, and you’re right, they are. Unfortunately though, some of these checks are not being performed and this causes payment disruption or direct debit collection delays within an organisation. Let me know if you have come across similar problems in your company and if you have any other checks to share….