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SEPA is coming

Wednesday 20 November 2013

photo Peter Verhaar

SEPA is on it's way and it's not going to make life easier, writes Peter Verhaar.

You've probably heard the cringeworthy radio ad about SEPA. We're ready for SEPA, chirpy Kees and Daphne tell us. I bet the ad agency people worked far into the night to come up with that one.

But what is SEPA exactly and what good is it to us? SEPA means Single European Payments Area and is another step towards the establishment of the euro as the European currency. It will come about on February 1 2014, so Wilders will have to get his skates on.

SEPA is used to standardise all payments in Europe so that in a couple of years there will be no difference between national and international money transfers. With a bit of imagination you could compare it to the abolition of the physical boundaries in Europe. Most people, however, only make national payments and then SEPA becomes a bit of a bother.

The usual nine digit number will be replaced by an IBAN code consisting of 18 numbers and letters. And yes, Postbank users, you will have an IBAN code too. Companies will have to put the new number on their correspondence because after the conversion their old number is no longer valid.

Companies which use pre-authorised payments, like energy companies, have a problem. If the system fails, the PAD becomes obsolete and the customer will have to go to the bank to solve the problem.

There's another reason why consumers will probably not to be too happy: from February 2014 banks will no longer automatically convert the old account number to the new SEPA version.

You will see a pop-up referring you to an IBAN converter after which you have to put in the – very long – number yourself. It's not a very client-friendly move.

Charities are the ones that will really bear the brunt of SEPA. If you want to support the Philippines, the number to send your money to is 555. It's a short and handy little number. After February 1, 2014 it will be - write with me - : NL08 INGB0000000555.

With a number like that the charities will be raking it in, won't they. People are only prepared to shell out if they can do so without inconvenience. I hope the banks will help to make sure they continue to do so.

Peter Verhaar was co-founder of Alex Beleggersbank and is now a financial columnist. This column first appeared on BNR radio.

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