As from 1 February 2014, all credit transfer or direct debit payments in euro made within or between any of the 27 EU Members States, Iceland, Liechtenstein, Norway, Switzerland and Monaco must be SEPA compliant. What does this mean for Maltese businesses in practical terms?

In a nutshell, with effect from 1 February 2014:

  • The SEPA requirements will not only apply to cross-border payments, but will apply equally to payments where both the payer and the beneficiary are in Malta - including, therefore, all "direct credit" arrangements to pay monthly salaries, etc., as well as all direct debit arrangements between service providers and their clients to settle telephone bills etc.
  • All credit transfers must specify:


(i) The beneficiary's International Bank Account Number (IBAN). Therefore payers must take steps to convert all beneficiary account numbers to IBAN format. Local banks are temporarily offering free conversion services to their customers to facilitate this process, so contact your bank to avail yourself of this service.

(ii)  The Business Identifier Code (BIC) of the beneficiary's bank. So payers need to obtain this information from their creditors if they do not already have it.

In view of these requirements, all businesses should make it a point to quote their own IBAN and their bank's BIC on all their invoices, so that this information is readily available to their own debtors when the latter need to effect settlement of those invoices.

  • All direct debits must likewise specify the payer's IBAN and the BIC of the payer's bank.
  • Where a business transmits "batched payments" to its bank (i.e. payment instructions covering individual credit transfers or individual direct debits which are not to be executed individually, but are bundled together for transmission), electronic file formats for such payments will change. New file formats based on ISO 20022 XML standards will be mandatory (except for microenterprises*). This will involve updating of the business's accounting, payroll and payment systems to incorporate the IBAN and BIC, and to generate / read XML file formats.



All this calls for close liaison between management, the Accounts and I.T. Departments, and external I.T. providers, and will require time and resources to implement. Provision must also be made for testing, and to give appropriate training to staff.

The clock is now rapidly ticking towards 1 February 2014, so there is no longer time to waste. Time is of the essence to ensure a smooth transition to SEPA. So GET READY for SEPA....ACT NOW!

* A microenterprise is one which employs fewer than 10 persons and whose annual turnover and/or annual balance sheet does not exceed € 2 million.


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