SCT Better Graded Than SDD by Corporates
- In an investigation conducted in June by French BFinance, thirty corporate treasurers reported on their SEPA migration. To this day, 20% have been issuing SCTs on a regular basis and deem that their quality of service is superior or equal to French national credit transfers. Among the 80% left, only 10% mention lacks in investment returns. The other respondents say they have ongoing plans regarding SCT, somehow slowed down by their delayed ETEBAC migration. 73% claim they plan to complete migration before end 2012, and even 33% before end 2011.
- As of SDD, 9% use it regularly (issuing of payment orders), 25% think they will be migrating in 2012 and 54% say they haven’t scheduled anything. Most of all, strong expectations have been expressed: 68% require more precisions on how to manage mandates and 64% on how to convert national direct debit authorisations into mandates. Also, 40% wish that formats be harmonised to exchange with banks (compared to 13% in the case of SCTs).
- In addition, mandates management offers (software packages, subcontracting) are deemed inappropriate by 35% of those interrogated. About one third also consider it is not worth the trouble. All in all, 44% believe that SDD’s quality of service is inferior compared to the existing French version, and 78% do not have any SDD migration plans yet.
- On SCT, only few improvements are requested, which shows SCT has been well integrated and that PSD enforcement has favourable effects (end of value dates, shorter execution delays, detailed rating, etc.).
- For the SDD, it should be reminded that only few companies use it (creditors). A one tenth conversion rate is therefore not such a bad score, even more so when compared with the average 0.1% of volumes in the whole Eurozone. Embracing SDD represents a major burden for issuers (creditors) compared to the SCT. It is all the more true if CFOs wish to use the e-mandate with an interbank validation, to lower the risk of disputes. On the debtor side, required adaptations are small, similar to those for SCT reception.
- Answers quoting lack of precision may be partly due to an incomplete appropriation, but also to the current instability of the SDD processing offer. There is no operational interbank scenario for online e-mandate validations yet. Also, a third SDD version, the Fixed Amount SDD, will come into force in November 2011. It will suppress the right to refund if the debited amount is set in the mandate.