New Year, New Opportunities for Multi-Currency Direct Debits

While the advantages of using direct debits for timely, predictable collections is widely accepted, companies that operate internationally often struggle to manage the diverse direct debit schemes in each country in which they operate in a consistent way. Typically, each scheme is distinct in terms of data requirements, mandate and payment terms. This creates challenges for companies that are seeking to maximise their operational efficiency by centralising and streamlining processes and technology. To support our clients in their productivity and harmonisation initiatives, SEB is leading the industry with a new multi-currency direct debit solution. This is already helping our clients to harmonise their direct debit activities across the Nordics and more widely across Europe.

In the Single Euro Payments Area (SEPA) the new direct debit instrument (SDD) is designed to harmonise the various direct debit schemes that currently exist across the 32 countries within SEPA and therefore enable international companies to standardise their operations. While the SDD is likely to bring considerable benefit to many companies by enabling them to centralise their collections across different countries, the problem of diverse direct debit schemes in the Nordic countries remains.

As a bank that is deeply committed to standardisation, and with considerable expertise in both SEPA and ISO 20022 XML formats, SEB wanted to offer clients a comparable degree of harmonisation across the Nordics as our clients are increasingly achieving in the SEPA zone. Consequently, we have created a single, ISO 20022 based, platform to enable all six of the direct debit schemes across the Nordic countries to be managed in a consistent way, including data and mandate management, with automated mapping to the data requirements for each scheme. Since the scheme was launched in the autumn of 2011, there has already been considerable interest amongst our clients, both financial institutions looking to white label our multi-currency direct debit platform to their customers, and our corporate clients. We have both financial institution and corporate clients now starting to use the platform in live operation, with a number of others currently in implementation.

In addition to the clear demand for an integrated, multi-currency direct debit solution, it is evident that there is significant interest amongst both financial institutions and corporates in a single direct debit scheme across the Nordic countries to replace the existing in-country schemes. Our view is that our multi-currency direct debit solution will act as a catalyst for more concrete plans to introduce such a scheme. This would further extend the opportunities for harmonisation that the SDD will provide for the SEPA zone countries. SEB will continue to champion clients’ needs with regulators, central banks and standardisation committees to ensure that their needs are represented. Furthermore, we will continue to enhance our multi-currency direct debit solution with a wider range of products and functionality to give our clients the consistent experience they are seeking.

Jonas Palm, GTS Product Management, SEB

This article has been published by the courtesy of Financial I.