Nearly two months ahead of the 1 February 20161 regulatory deadline which will require Eurozone Payment Service Providers (PSPs) to process SEPA payments using only the IBAN2 - rather than the BIC and IBAN as they are currently - Payments UK, together with SWIFT, has launched a new tool to help these PSPs when sending SEPA payments to the UK. The new SEPA IBAN-Only directory will help PSPs derive the BIC from the IBAN, which will still be used behind the scenes to route a SEPA payment correctly to UK beneficiaries.
A SEPA payment is defined as a credit transfer or direct debit made in euro (€) in any of the 34 SEPA countries. UK recipients of SEPA payments are most commonly businesses that conduct cross-border trade or individuals.
Article 5(7) of the SEPA Regulation states that from 1 February 2014 for national SEPA payment transactions, and 1 February 2016 for cross-border SEPA payments, customers are no longer required by their PSP to provide the BIC when initiating a payment. The change will increase efficiency and reduce the instances of payment errors, as it will enable more payments to be made through the use of Straight Through Processing, without the need for manual intervention.
Payments UK has brought the industry together to create a directory, which amalgamates data from SEPA receiving Payment Service Providers in the UK, so as to enable Payment Service Providers in SEPA countries to derive the correct BIC from a GB IBAN, and accurately route euro payments to the UK. The directory can either be downloaded and integrated (via login to swift.com) into the end user’s back office systems to support Straight Through Processing, or accessed using the individual lookup facility, which is free to use.
Maurice Cleaves, Chief Executive of Payments UK said:
“Payments UK has worked hard on behalf of the collective industry to build – and deliver ahead of the regulatory deadline - a user friendly tool. By delivering the directory early, we are enabling organisations to familiarise themselves with the new tool, as well as hopefully reminding any remaining UK institutions that receive SEPA payments, who are not currently involved, to get in touch and to participate.”
If you are either an institution that receives SEPA payments in the UK, but is still to participate in the directory, or a data vendor who requires access to the UK SEPA IBAN-Only directory, please contact SEPAIO_Ops@paymentsUK.org.uk.
1As the UK is not a Eurozone country Article 16(8) of the SEPA Regulation (EU) No 260/2012 applies, which defers the deadline for “IBAN only” to 31 October 2016. However, from a practical perspective, the 1 February 2016 date is of relevance since by then Eurozone PSPs will need to be able to derive the correct BIC from any given GB IBAN.
2It should be noted that this only applies to SEPA payments. Payments sent abroad in other currencies (e.g. Dollars or Sterling) or sent in euro but to a destination outside SEPA will still require the BIC.