European Payments Council What developments have taken place and how are these related to standardisation. November 4, 2009 Igo Raadt
Content Standard European Payments Council Euro money SEPA message flow ISO 20022 XML messages Use of ISO 20022 XML messages for SEPA Conclusion Questions 2
Standard 3
Standard 4
European Payments Council Intro 1/2 The European Payments Council (EPC) is the decision-making and coordination body of the European banking industry in relation to payments. EPC was established in June 2002 and adopted its current governance structure in mid 2004. Its purpose is to support and promote the creation of a Single Euro Payments Area (SEPA); a single harmonised, open and interoperable European domestic payments market achieved through industry self-regulation. EPC defines common positions for core payment services within a competitive market place, provides strategic guidance for standardisation, formulates best practices and supports and monitors implementation of decisions taken. This is done in such a way that banks can maintain self-regulation and meet regulators' and stakeholders' expectations as efficiently as possible. 5
European Payments Council Intro 2/2 EPC now consists of 74 Members, composed of banks and banking associations. Over 300 professionals are directly engaged in the work programme of the EPC from 31 countries and representing all sizes and sectors of credit institutions within the European market. The EPC develops the payment schemes and frameworks necessary to realize the Single Euro Payments Area (SEPA). SEPA is an EU integration initiative in the area of payments designed to achieve the completion of the EU internal market and monetary union. Vision: An euro area in which all payments are domestic, where the current differentiation between national and cross-border payments no longer exists 6
European Payments Council Governance structure 7
European Payments Council Competitive and Cooperative space 8
European Payments Council Deliverables SEPA Credit Transfer scheme* SEPA Direct Debit Core scheme and SEPA Direct Debit Business to Business scheme (incl e-mandates)* Implementation guidelines for the relevant ISO 20022 XML PACS messages for all schemes PACS: Payments_Standards-Clearing_and_Settlement Implementation guidelines for the relevant ISO 20022 XML PAIN messages for all schemes PAIN: Payments_Standards-Initiation (recommendation) http://www.europeanpaymentscouncil.eu/content.cfm?page=sepa_credit_transfer http://www.europeanpaymentscouncil.eu/content.cfm?page=sepa_direct_debit_(sdd) * Incl process description, definition of data sets and their attributes 9
Euro money Euro coins standardised however only front of the coin Euro bank notes standardised however first characters of serial number identify issuing country Collector coins 10
SEPA message flow Credit Transfer 4 corner model Debtor e.g. Invoice Creditor Credit Transfer B&T Reporting CSM (Clearing And Settlement Mechanism) B&T Reporting Credit Transfer Reject Return Debtor Bank Creditor Bank 11
SEPA message flow Direct Debit 4 corner model Debtor Request for mandate Signed mandate Pre-notification Creditor Refusal Request for refund B&T Reporting Block account Debtor Bank CSM (Clearing And Settlement Mechanism) Direct debit Refuse/reject Cancellation Reverse Return/Refund Direct Debit Revocation Reversal B&T Reporting Status Reporting Creditor Bank 12
SEPA message flow Direct Debit e-mandates Debtor Creditor Initiation Confirmation Request auth. Authentication Confirmation Internet Mandate Proposal B&T Reporting Mandate Proposal e-mandate Validation Service Provider in cooperation with Debtor Bank Routing Service Provider 13
ISO 20022 XML messages - Payments Initiation (incl Mandate Management) messages (PAIN) - Payments Clearing & Settlement messages (PACS) - Cash Management messages (CAMT) - Account Management messages (ACMT) - Securities Management messages (SEMT) - Securities Settlement messages (SESE) - Securities Trade messages (SETR) - etc. Have been developed with global scope, not SEPA specific 14
Use of ISO 20022 XML messages for SEPA Guidance/directions from EPC Implementation guidelines: - Guidance how to use the messages for SEPA. - Bridging the differences in definitions and terminology between rulebook and ISO New ISO messages so also new implementation guidelines: - In Nov 2010 new message version will be implemented in the interbank space - Rules for interbank space for change over date 15
Use of ISO 20022 XML messages for SEPA Additional features / requirements Community AOS - Character set (GR) - Payment date (FI) - Bundling invoices and credit notes in one payment (FI) Customer to Bank & Bank to Customer AOS - Conversion legacy into SEPA - Additional processing features - Additional reporting features 16
Conclusions Like today with legacy products also for SEPA standardisation is achieved With respect to financial supply chain standardisation of reporting would be welcome 17
Questions How What Who How When When Where What Explain Why Who Why Where Explain 18