Multinational organisations may find they are unable to make cross-border payments in Europe from next year if they fail to overhaul their IT systems to comply with new standards, according to a leading payment solutions vendor.

As part of a European Payments Council resolution passed last year, firms must present their payment data in the correct format, complying with Bank Identifier Code (BIC) and International Bank Account Number (IBAN) standards, explained Jon Williams of Eiger Systems.

Failure to do so currently means firms may be incurring charges from their banks, but from January 2007, banks receiving payments without a valid BIC and IBAN could reject them, leaving large multinationals unable to pay suppliers in the rest of Europe, he added.

"The challenge for firms' [IT managers] is that they are [likely to have] many different systems for processing payments," he argued. "They have to understand which are compliant with that sort of data and then make the decision to upgrade or [replace] those that aren't – companies have to make these business decisions and they don't have long to do it."

He added that banking organisations could have done more to alert firms to the new rules, and businesses which have not addressed the problem yet will have to find extra money in their limited IT budgets to complete the work in-house or buy in a solution.