From 1 February 2014, payment transactions across the euro area have changed. Indeed, as a result of a decision by the European Commission, SEPA will enter into force on that day. This has an impact on the Corporate Card as it exists today. It also affects you, as an employer.
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Administrative burden for banks increases
One of the most far-reaching changes concerns direct debit. Because this will be a European product, a number of strict safeguards have been built in to protect consumers.
That in itself is a nice idea, but it does affect the Corporate card, including within the Netherlands.
For instance, telephone authorisations are no longer allowed, the check mark on the internet is no longer legally valid, and the employer must have an authorisation form signed by the employee.
Only after the form is registered and archived can the mandatory pre-notification be sent, unless otherwise agreed. This is not workable for banks.
Risk of corporate card for employer unacceptable
Employers and employees are helped by a business payment tool such as the Corporate card.
But as a stick, to reduce the risk of misuse and to collect receipts, employers sometimes have the Corporate Credit Card collected from the employee's private bank account.
This is also known as Corporate liability / Individual pay. With the new SEPA rules, it is very easy for an employee to reverse the transaction. If the process does not go well or the employer does not comply with the SEPA rules, the employee has 13 months to reverse.
So it may happen that an employee may still reverse the transaction after leaving the company. For the employer, this is a huge risk. Because the consequences can lead to financial, administrative and even a tax nightmare.
Subsequently, the banks also see this as a problem and have decided to end Corporate liability / Individual pay. It is a legal drama and it greatly clouds the relationship with you, the customer. Because ultimately, you, as the company, are ultimately responsible.
Issue debit cards yourself and manage spending limits
Here offers SimpledCard the solution. Because with SimpledCard, you can issue these business debit cards to your employees yourself. In addition, you have real-time access to the spending limit, automatic administrative processing and abuse and fraud disappear.
Want to know more about what SimpledCard can do for you? Please visit contact with us or request a no-obligation quotation to.
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