Threat to cash flow for SMEs in Europe

European companies, and particularly small and medium-sized enterprises (SMEs), could yet suffer a cash-flow squeeze from direct debits under the Single Euro Payments Area (Sepa) regulation, despite the European Commission handing companies an extra six months to comply. According to European Central Bank data, only 41% of companies were Sepa direct debit (DD) compliant as at the end of December 2013, in contrast to 74% for Sepa credit transfers, despite the fact Sepa has been six years in the making.