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EPC Newsletter
Issue 25 - January 2015

The future of payments: scenario building in the digital age

This EPC Newsletter takes a closer look at latest developments expected to shape the future of European payments in 2015 and beyond.

Javier Santamaría reports on preliminary conclusions reached at the session ‘payments – improving users’ experience and looking into the future’ hosted by the European Commission at its conference on emerging challenges in retail finance and consumer policy which took place on 18 November 2014. Santamaría points out: “The speed at which developments evolve and their impact on society, at multiple levels, pose new challenges to building future scenarios that may claim to provide at least an approximation to new emerging realities.”

“The probability that a new solution – which could render mid to long-term predictions obsolete – is just around the corner, should be factored into the scenario building exercise,” he adds.

To illustrate the point: in December 2014, the European Banking Authority (EBA) published its finalised guidelines on the security of internet payments that payment service providers in the European Union will be expected to implement by 1 August 2015. The guidelines are based on recommendations first issued by the European Forum on the Security of Retail Payments (SecuRe Pay) in January 2013.

Examining the EBA guidelines, Etienne Goosse comments: “In the last two decades many security solutions were implemented, only to have been rendered obsolete as technology evolves.” For example, since the issuance of the Secure Pay recommendations on the security of internet payments in 2013, “tokenisation has been picked up as one of the prevalent security solutions in any future e-payments system but, understandably, at the time of publication, the recommendations did not take tokenisation into much consideration.”

The European Payments Council (EPC) therefore, suggested that new developments would be taken into account when finalising the EBA guidelines as otherwise “innovation in this area could be seriously hindered.”

With regard to scenario building in the digital age, Santamaría concludes: “Thinking outside the box is a valuable exercise. Keeping in mind established wisdom doesn’t hurt either. Regulation – now and in the future – should strive to achieve legal certainty, balance, technology neutrality and a level playing field amongst all players.”

Please recommend the EPC Newsletter to your colleagues – a free subscription can be obtained by clicking here. The next issue will be published in April 2015.

Focus: On Integration and Innovation

The Future of Payments: European Commission Invited Exchange of Views at its Conference on Emerging Challenges in Retail Finance and Consumer PolicyParticipants discussed latest developments, and ones to come, in terms of consumers' safety, accessibility and convenience

29.01.15 By Javier Santamaría

“Everything changes but change itself. You cannot step twice into the same river, for other waters and yet others go flowing ever on,” observed Heraclitus of Ephesus (circa 535 – 475 before common era). This certainty is the live bait that provokes analysts to release imagination and engage in scenario building to explain how, in their view, the future could look. In that spirit, the European Commission provided an opportunity to forge ahead of actual events at its ‘Conference on emerging challenges in retail finance and consumer policy’, held in Brussels on 18 November 2014. Topics discussed included ‘Payments: improving users’ experience and looking into the future’. The Commission called for “fresh thinking” on emerging payment methods as well as new players in the industry (and their impact on incumbents). Participants were invited to reflect about potential developments in the next 5 to 10 years and “what would need to happen in the market and among regulators to make sure the evolution is positive, for all parties”. In this article, Javier Santamaría, who participated in the conference panel on payments, offers for discussion a methodology of scenario building which allows designing adequate forward-looking strategies in a fast moving environment. He also reports on preliminary conclusions on the future of payments reached at the conference. The European Commission indicated that “these conclusions will be followed-up by further policy considerations” in the first part of 2015. On that note, Santamaría concludes: thinking outside the box is a valuable exercise. Keeping in mind established wisdom doesn’t hurt either. Regulation – now and in the future – should strive to achieve legal certainty, balance, technology neutrality and a level playing field amongst all players.

Key Information in this Article

This article reflects contributions from conference participants (including the author) who attended the session ‘payments – improving users’ experience and looking into the future’ at the European Commission conference on emerging challenges in retail finance and consumer policy which took place on 18 November 2014. The conference gathered more than 200 stakeholders representing the financial industry, consumers, national public authorities, European Union (EU) institutions, payment organisations and academics.

Scenario building in the digital age: a possible approach, as suggested by this author, could be: firstly, identify current patterns and the factors that will influence the future. Secondly, establish the orientation those elements will produce when considered together. Thirdly, venture to make predictions on the future of payments (in mature markets).

Preliminary conclusions on the future of payments: the Commission summarised the “three main ideas” shared by most of the participants as follows:

  • Mobile payments: “many saw the future of payments in mobile payments, however not only related to mobile phones. There was a general feeling that in Europe mobile payments had still not taken up due to the fact that it was not yet considered safe, common standards were still lacking and solutions were too often confined to the national level.” Addressing consumers’ key concerns regarding security and data protection were cited as the main goals to be achieved through convenient but safe payment solutions.
  • Instant payments: “should spread, on a peer-to-peer [P2P] (mobile) level but also in the context of traditional bank transfers, with (almost) real time ability to use the funds. While some progress is being made (on P2P notably in Scandinavia) and on instant payments (with faster payments in the UK), it was deplored that solutions were in most cases confined to the domestic level.”
  • Regulation: most participants felt “that a good mix between regulation, standards and market forces was needed to move the European payments market one step further in the future. Achieving a Single Market in new evolving payment methods should be a priority. Others warned against overregulation and called for a right balance between cooperation and competition. Regular consultations were crucial as well as time to measure the effects of regulation.”

Promoting a secure, competitive and innovative payments market in the EU: the Commission indicated that the conclusions reached at the conference will inform its further work programme. Considering also the plethora of EU regulatory initiatives impacting euro payments already in the pipeline, this author would like to stress: regulation – now and in the future – should strive to achieve legal certainty, balance, technology neutrality and a level playing field amongst all players.

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Legal and Regulatory Issues

Guidelines on the Security of Internet Payments Released by the European Banking Authority: a Two-Step Approach EPC response to the consultation on guidelines on the security of internet payments launched by the European Banking Authority

29.01.15 By Etienne Goosse

The European Banking Authority (EBA) was created in 2011 to ensure “effective and consistent prudential regulation and supervision across the European banking sector”. In October 2014, the EBA published a consultation paper on the implementation of its guidelines on the security of internet payments. The paper was based on the recommendations of the European Forum on the Security of Retail Payments (SecuRe Pay), a voluntary cooperative initiative between relevant authorities from the European Economic Area, which were released in January 2013 with an implementation deadline of 1 February 2015. The conversion of SecuRe Pay recommendations into EBA guidelines was intended to provide a solid legal basis in order to ensure consistent implementation across all European Union Member States and to reassure financial institutions that required investment and system changes have a consistent regulatory framework. Following the outcome of the public consultation, the EBA decided to issue its guidelines to come into force in August 2015. The guidelines cover three main categories; the general control and security environment, specific control and security measures for internet payments, and customer awareness, education and communication. In this article, Etienne Goosse examines the background to the consultation paper, the question it asked, the response of the European Payments Council (EPC) and the finalised guidelines.

Key Information in this Article The European Banking Authority (EBA) guidelines on the security of internet payments:
  • New roles of the EBA in relation to the forthcoming revised Payment Services Directive (PSD2): new roles conferred could include transparency as register for regulated and exempted entities, improving coordination of home/host supervision, defining security requirements for electronic payments and improving incident reporting throughout the European Union (EU).
  • The role of the European Forum for the Security of Retail Payments (SecuRe Pay) in the EBA consultation: Following a public consultation in 2012, the European Central Bank (ECB) released the final recommendations for the security of internet payments as developed by SecuRe Pay in January 2013. SecuRe Pay also published an assessment guide in February 2014 to assist supervisory and oversight authorities of the EU Member States that are responsible for assessing compliance with these recommendations.
  • In October 2014, the EBA published a consultation paper on the implementation of its guidelines on the security of internet payments based on these SecuRe Pay recommendations. These guidelines are the first output of the joint work undertaken by the EBA and the ECB. The consultation ran until 14 November 2014.
  • The consultation asked the question: "Do you prefer for the EBA guidelines to:
    1. Enter into force, as consulted, on 1 August 2015 with the substance set out in this consultation paper, which means they would apply during a transitional period until stronger requirements enter into force at a later date under PSD2.
    2. Anticipate these stronger PSD2 requirements and include them in the final guidelines under PSD1 that enter into force on 1 August 2015, the substance of which would then continue to apply under PSD2."
  • In its response to the consultation, the European Payments Council (EPC) put forward a third answer, option c), a scenario whereby the EBA guidelines would be issued only after entry into force of PSD2 (according to Article 103 of the draft PSD2) and publication of the regulatory technical standards as may be mandated of EBA in accordance with PSD2, following a consultation of the market and safeguarding an adequate timeframe for implementation.
  • In its response the EPC had added that if the EBA were to not accept the recommended ‘option c’, it would have a preference for option a) (i.e. the two-step approach) subject to the EBA guidelines remaining based on the SecuRe Pay recommendations published in 2013 which was the basis for the ongoing implementation efforts.
  • The EBA published the finalised guidelines on 19 December 2014 which set the minimum security requirements that payment service providers in the EU will be expected to implement by 1 August 2015. An essential element for the EBA guidelines is the reliance on the concept of strong customer authentication.

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Opinion and Editorial

Virtual Currencies: a House of Cards or a Mass Market Trend? The Answer to that Question Remains PendingA commentary on the latest developments in the emerging virtual currencies landscape

29.01.15 By Edith Rigler

At present, virtual currencies (VCs) represent a miniscule amount of transactions globally. In its opinion on VCs published in July 2014, the European Banking Authority (EBA) points out that “using a generous interpretation, the number of global virtual currency transactions has never exceeded 100,000 per day across the globe, compared to approximately 295 million conventional payment and terminal transactions per day in Europe alone (i.e. credit transfers, direct debits, e-money transfers, cheques, etc.)”. This said, public authorities around the globe are assessing how to deal with the phenomenon. The EBA, for example, commented: “A regulatory approach (…) would need to comprise, amongst other elements, governance requirements for several market participants, the segregation of client accounts, capital requirements and, crucially, the creation of ‘scheme governing authorities’ that are accountable for the integrity of a VC scheme and its key components, including its protocol and transaction ledger.” In other regions, the authorities do not (yet) see a need to regulate or focus on a different set of questions such as, for example: are VCs legal currency? Are they an ‘asset’, a ‘property’, a ‘financial unit’? If they are an asset, is it taxable? If so, does capital gains tax apply? In this article, Edith Rigler takes a closer look at the latest developments in the VC landscape and the emerging regulatory response.

The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.

Key Information in this Article In this article, the author analyses latest developments with regard to virtual currencies (VCs) and, specifically, Bitcoin. The technology behind Bitcoin: Bitcoins exist as computer code based on cryptography and are stored on electronic wallets. Bitcoin does not require a central clearing house or financial institution clearing transactions. Users must have an internet connection and Bitcoin software to make payments to another public account/address. The user can send payments within a decentralised, peer-to-peer network, can purchase and sell Bitcoins through online exchanges and trade Bitcoins for traditional currencies. Demand and supply: on the supply side, the infrastructure needed to support VCs is building rapidly. However, the demand for Bitcoin remains limited. Between 55 and 73 percent of Bitcoins are not in circulation, but are simply ‘hoarded’, i.e. they are held in accounts rather than being traded or spent. One suspects that this has to do with Bitcoin’s price volatility. VCs as an alternative payment method: while VCs are not legal tender in any country right now, many perceive their value primarily as an alternative payment method: Bitcoin transactions are faster and cheaper than traditional payment transactions routed via banks. Bitcoin is also touted as helping financial inclusion of the unbanked: populations that do not have bank accounts but can access the internet could theoretically make or receive Bitcoin payments. However, these benefits are more relevant in emerging markets and less relevant in the European Union (EU), where existing and pending EU legislation is already explicitly aiming at increasing transaction speed and reducing cost. The advent of SEPA has played an important part in this regard. The emerging regulatory response: national regulators everywhere have started to review VCs. Some have banned VCs, others restrict certain activities, and a third group are still monitoring and reviewing their position. Several central banks have issued warnings about the risks of investing in VCs. The regulatory response will ultimately depend on whether VCs will become a viable alternative payment method as well as their impact on financial stability and monetary policy. The content of this article was first published with a series for the Equens Blog. The European Payments Council (EPC) wishes to thank the author and Equens for the permission to publish this article in the EPC Newsletter.

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SEPA Credit Transfer (SCT) & SEPA Direct Debit (SDD)

Next Steps Agreed by the ERPB with Regard to SCT and SDD Post-migration Issues, pan-European Electronic Mandate Solutions and Instant PaymentsThe ERPB, chaired by the European Central Bank, is a multi-stakeholder body that helps “fostering the development of an integrated, innovative and competitive market for retail payments in euro in the EU”

29.01.15 By Jean-Yves Jacquelin

As previously reported in this newsletter, SEPA is a European Union (EU) integration initiative pursued by the EU institutions. These are the European Commission, the European Parliament, the Council of the EU representing EU governments and the European Central Bank (ECB). Today, the EU authorities expect that non-competitive SEPA solutions are the result of multi-stakeholder endeavours involving, essentially, representatives of all impacted parties on the demand, supply and regulatory sides. The Euro Retail Payments Board (ERPB), created and chaired by the ECB, facilitates this approach. The ERPB’s work consists mainly of identifying strategic issues and work priorities (including business practices, requirements and standards) and ensuring they are addressed. Members of the ERPB represent the demand and supply sides of the payments market. The European Payments Council (EPC) is a member of the ERPB. EU national central banks also participate in the ERPB. The European Commission acts as an observer. In this article, Jean-Yves Jacquelin describes the interaction between the ERPB and other stakeholders including the EPC. He also reports on next steps agreed by the ERPB at its second meeting held on 1 December 2014 with regard to SEPA Credit Transfer and SEPA Direct Debit post-migration issues, pan-European electronic mandate solutions and instant payments in euro. (Information on these ERPB work items was previously published with the EPC Blog of 9 December 2014.)

Key Information in this Article The Euro Retail Payments Board (ERPB), created and chaired by the European Central Bank (ECB), is a multi-stakeholder body which helps foster “the development of an integrated, innovative and competitive market for retail payments in euro” in the European Union (EU). Next steps agreed by the ERPB at its second meeting held on 1 December 2014 with regard to SEPA Credit Transfer (SCT), SEPA Direct Debit (SDD), pan-European electronic mandate solutions and instant payments in euro:
  • SCT and SDD post-migration issues: to ensure that any implementation and functioning issues which might prevent the SEPA payment schemes from delivering their full potential going forward are addressed, the ERPB members agreed on the main, as well as more technical, recommendations related to the functioning of the SCT and SDD Schemes. The full set of technical recommendations, (including the addressees thereof), is detailed in Annex 1 included in the ERPB statement published following its 1 December 2014 meeting.
  • Pan-European electronic mandate solutions: the ERPB members agreed its main recommendations relating to the issuance, acceptance and maintenance of electronic mandates for SDD at the pan-European level. The full set of recommendations, (including the addressees thereof), is detailed in Annex 2 included in the ERPB statement published following its 1 December 2014 meeting.
  • Instant payments in euro: taking into account emerging national solutions and to prevent market fragmentation, the members of the ERPB agreed on the need for at least one pan-European instant payment solution for euro open to any payment service provider in the EU. The ERPB agreed to invite the supply side of the industry, (in close cooperation with the demand side and with the active involvement of the European Payments Council as a potential scheme developer), to make an assessment of the issues related to pan-European instant payment solutions in euro to be presented at the ERPB meeting in June 2015.
Documentation related to the topics mentioned above published by the ECB following the second meeting of the ERPB is included in the ‘related links’ at the end of this article.

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SEPA Credit Transfer (SCT) & SEPA Direct Debit (SDD)

In January 2015 the EPC Published the SDD Core Rulebook Version 9.0 and SDD Business to Business (B2B) Rulebook Version 7.0 to Take Effect in November 2016The SDD Core Rulebook version 9.0 includes a shorter standard time cycle; both the SDD Core Rulebook version 9.0 and SDD B2B Rulebook version 7.0 feature simplified use of sequence types

29.01.15 By Jean-Yves Jacquelin

On 26 January 2015 the European Payments Council (EPC) published the SEPA Direct Debit (SDD) Core Rulebook version 9.0 and the SDD Business to Business (B2B) Rulebook version 7.0. The SDD Core Rulebook version 9.0, the SDD B2B Rulebook version 7.0 and associated implementation guidelines will take effect on 20 November 2016. The EPC has traditionally published updated versions of the rulebooks and associated implementation guidelines once annually in November to take effect in November of the next year. Exceptionally, the EPC resolved to publish the SDD Rulebook versions to take effect in November 2016 in January 2015. This decision was made to give payment service providers participating in the SEPA payment schemes an extended lead-time to implement principal changes incorporated in the SDD Core Rulebook version 9.0 and SDD B2B Rulebook version 7.0 prior to them taking effect. The SDD Core Rulebook version 9.0 introduces a shorter standard time cycle. Both the SDD Core Rulebook version 9.0 and SDD B2B Rulebook version 7.0 have been amended to simplify the use of sequence types. In this article, Jean-Yves Jacquelin describes again the main changes introduced into the SDD Core Rulebook version 9.0 and SDD B2B Rulebook version 7.0 (previously described in a dedicated article published in the October 2014 edition of the EPC Newsletter). He also recaps the rulebook release management process applicable until November 2017.

Key Information in this Article The SEPA Direct Debit (SDD) Core Rulebook version 9.0, the SDD Business to Business (B2B) Rulebook version 7.0 and associated implementation guidelines, published on 26 January 2015, will take effect on 20 November 2016. Main change included with the SDD Core Rulebook version 9.0: as of the effective date of November 2016 of the SDD Core Rulebook version 9.0, all collections presented for the first time, on a recurrent basis or as a one-off collection can be presented up to one interbank business day prior to the due date. This change does not impact the creditor as the creditor can continue to use the currently applicable SDD Core collection timelines after November 2016. Main change included with the SDD Core Rulebook version 9.0 and SDD B2B Rulebook version 7.0: the SDD Rulebooks currently require that the payment message sent by the creditor’s bank to request a direct debit collection specifies whether the transaction is a first, one-off, recurrent or last collection. These specifications are also referred to as ‘sequence types’. The SDD Core Rulebook version 9.0 and SDD B2B Rulebook version 7.0 have been amended to simplify the use of sequence types by making the sequence type ‘first’ optional. This change does not impact creditors collecting SDD payments. The rulebook release management process applicable until November 2017:
  • The current SEPA Credit Transfer (SCT) Rulebook version 7.1, SDD Core Rulebook version 7.1 and SDD B2B Rulebook version 5.1 remain in effect until November 2015.
  • The SCT Rulebook version 8.0, SDD Core Rulebook version 8.0 and SDD B2B Rulebook version 6.0, published in November 2014, will take effect on 22 November 2015. The SCT Rulebook version 8.0 will remain in effect until November 2017. The SDD Core Rulebook version 8.0 and SDD B2B Rulebook version 6.0 will remain in effect until November 2016.
  • The SDD Core Rulebook version 9.0 and SDD B2B Rulebook version 7.0, published in January 2015, will take effect on 20 November 2016 and remain in effect until November 2017.
The next scheme change management cycle will roll out in 2016 / 2017: as previously reported, there will be no further scheme change cycle in 2015. This means that the period for stakeholders to submit suggestions for additional changes to the rulebooks is open and will end on 31 December 2015. These suggestions will then be considered with regard to the rulebook versions to be published in 2016 to take effect in 2017. The links to documentation cited in this article are included in the ‘related links’ at the end of this article.

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Legal and Regulatory Issues

EU Payments Legislative Package: Strong Concerns of European BanksThe focus on innovation and competition issues should not be to the detriment of consumer protection

29.01.15 By Séverine Anciberro and Sébastien de Brouwer

On 24 July 2013 the European Commission published a ‘payments legislative package’ which includes its proposals for a revised Payment Services Directive (PSD2) and a new Regulation on interchange fees for card-based payment transactions (IFR). Both proposals have been reviewed, respectively, by the European Union (EU) co-legislators, i.e. the European Parliament and the Council of the EU representing EU Member States. In a next step, the so-called ‘trialogue’ process will be initiated, whereby the European Commission, the European Parliament and the Council of the EU will have to agree the final version of the forthcoming PSD2 and IFR. Provided that there are no delays, PSD2 could be adopted in the first half of 2015, and be implemented in national legislation some two years after its adoption. It is expected that the EU co-legislators will also adopt the IFR in the first half of 2015. In this article, Séverine Anciberro and Sébastien de Brouwer of the European Banking Federation (EBF) analyse the possible implications of these forthcoming legislative acts. The authors point out: “The current proposals for PSD2 and IFR do not guarantee that consumers will be better off. The EBF fully supports innovation and competition in payments but is keen to see that the upcoming trialogue talks in Brussels on the PSD2 address strong concerns over data protection, privacy, and account security and user convenience.”

The views expressed in this article are solely those of the authors and should not be attributed to the European Payments Council.

Key Information in this Article In this article, the authors set out principal concerns with regard to the forthcoming revised Payment Services Directive (PSD2) and the new Regulation on interchange fees for card-based payment transactions (IFR) and their impact on the European payments market.  Forthcoming PSD2: 
  • The current focus of the debate on innovation and competition issues is to the detriment of other key themes such as payment security, consumer and data protection and with them the general confidence of European citizens in electronic means of payments.
  • In particular, security principles and procedures to be put in place when a payment initiation services’ provider is part of the payment process remain unclear. Consequently, it risks a negative impact on the user and on his awareness of security risks.
  • Another key concern is the lack of coherence between the proposed PSD2 and other current regulatory initiatives under negotiation.
Forthcoming IFR:
  • While the intention of the Regulation to lead to more transparency of interchange fees is supported, it can be questioned whether this indeed will lead to lower fees for consumers. The provisions of the IFR clearly favour retailers and could mean that consumers face higher costs and fewer benefits from using payment cards.
The authors call on the European Commission, the European Parliament and the Council of the European Union (EU) representing EU governments to ensure that the forthcoming PSD2 will not compromise the existing level of consumer data protection, privacy, online account security and user convenience in the European payments market.

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Opinion and Editorial

A New Global Initiative Driven by the Financial Stability Board and the G20: the Legal Entity Identifier (LEI) Empowers Market Participants to Mitigate Risks and Increase Operational Efficiencies The LEI is based on the ISO 17442 standard and is available to any market participant free-of-charge

29.01.15 By Gerard Hartsink

Created in 2009, the Financial Stability Board (FSB) seeks to strengthen financial systems and increase the stability of international financial markets globally. In the wake of the 2008 financial crisis, the FSB as well as the finance ministers and central bank governors represented in the Group of Twenty (G20) advocated developing a universal legal entity identifier (LEI) applicable for public and private purposes to any legal entity that engages in financial transactions. Implementation of the LEI will increase the ability of authorities in any jurisdiction to evaluate risks, conduct market surveillance and take corrective steps. The LEI is currently required in the United States and the European Union for the execution of transactions with, and reporting of, counterparties to over-the-counter (OTC) derivative trades. Many other regulators around the world are implementing the LEI for financial market transactions or are considering doing so. Use of a LEI also generates tangible benefits for businesses including reduced counterparty risks and increased operational efficiencies. Following up on the recommendations of the FSB endorsed by the G20 in 2012, public authorities cooperating with private sector experts created the Global LEI System (GLEIS). In June 2014, the FSB established the Global LEI Foundation (GLEIF) as the operational arm of the GLEIS. In this article, Gerard Hartsink, Chairman of the GLEIF Board, outlines next steps to promote global LEI adoption and identifies, specifically, the added value of applying the LEI in the payments industry.

The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.

Key Information in this Article The legal entity identifier (LEI) is based on the ISO 17442 standard developed by the International Organization for Standardization (ISO) and is available free of charge for users. In 2011, the Group of Twenty (G20) called on the Financial Stability Board (FSB) to take the lead in developing recommendations for a global LEI and a supporting governance structure. The related FSB recommendations endorsed by the G20 in 2012 led to the development of the Global LEI System (GLEIS) that will, through the issuance of LEIs, provide unique identification of legal entities participating in financial transactions across the globe. This GLEIS is composed of three tiers: 
  1. Regulatory Oversight Committee (ROC): established in January 2013 with responsibility for the governance and oversight of the GLEIS. It represents members from public authorities across the globe.
  2. Global LEI Foundation (GLEIF): established in June 2014 as the operational arm of the system.
  3. Federated Local Operating Units (LOUs): supply registration and other services, and act as the primary interface for registrants for LEIs. 
In June 2014, the FSB reiterated that global adoption of the LEI underpins multiple “financial stability objectives” and also offers “many benefits to the private sector, including lowering operational risks and facilitating straight through processing”. Areas where the application of the LEI would add value, specifically, for the payments industry include:
  • Corresponding banking relations: identification of direct and indirect participants.
  • SEPA Direct Debit and other direct debit schemes: transparency for users of entities involved in direct debit transactions.
  • E-payments: identification of web merchants and transparency to users.
  • Scheme owners: LEI as a mandatory attribute for risk management by the scheme manager.

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SEPA for Mobile

New ERPB Working Groups on Mobile Payments and Publication of the Second Edition of the EPC's ‘Overview of Mobile Payments Initiatives´New ERPB working groups address person-to-person mobile payments and mobile and card-based contactless proximity payments. Second edition of EPC report includes mobile payments initiatives launched between June and October 2014

29.01.15 By Dag-Inge Flatraaker

As reported previously in this newsletter, the European Union (EU) authorities driving the SEPA process have clarified that migration to harmonised SEPA payment schemes and technical standards, as mandated by EU law, does not conclude this EU integration project. SEPA is “more than just credit transfers and direct debits. It is also about card payments and might also cover internet and mobile payments”, former Vice-President of the European Commission Michel Barnier reiterated on 1 August 2014. Consequently, the Euro Retail Payments Board (ERPB), chaired by the European Central Bank, in December 2014 decided to set up a new working group focusing on person-to-person mobile payments as well as a new working group on mobile and card-based contactless proximity payments. The purpose of these working groups is to analyse existing solutions and identify any barriers to the development of solutions and the interoperability at pan-European level. In this article, Dag-Inge Flatraaker describes the mandate of the ERPB working groups on person-to-person mobile payments and mobile and card-based contactless proximity payments. (Information on these ERPB working groups was previously published with the EPC Blog of 9 December 2014.) In addition, he introduces the second and updated edition of the ‘EPC Overview of Mobile Payments Initiatives’ published in December 2014.

Key Information in this Article The mandate and composition of the Euro Retail Payments Board (ERPB): on 19 December 2013, the European Central Bank (ECB) announced the launch of the ERPB, which helps foster “the development of an integrated, innovative and competitive market for retail payments in euro” in the European Union (EU). Its work consists mainly of identifying strategic issues and work priorities (including business practices, requirements and standards) and ensuring they are addressed. Members of the ERPB represent the demand and supply sides of the payments market. The European Payments Council (EPC) is a member of the ERPB. EU national central banks also participate in the ERPB. The ERPB is chaired by the ECB. The European Commission acts as an observer. New ERPB working groups on mobile payments established in December 2014:
  • Working group on person-to-person mobile payments: focusing on person-to-person mobile payments with the mandate to analyse the high-level requirements for the development of pan-European solutions.
  • Working group on mobile and card-based contactless proximity payments: addressing the issues related to the muted take up of mobile and card-based contactless proximity payments.
Second and updated edition of the EPC’s ‘Overview of Mobile Payments Initiatives’: the second edition, published on 12 December 2014, describes various existing and new initiatives on mobile payments in SEPA and beyond. It aims to create awareness on the latest developments based on contributions by EPC members on community initiatives and initiatives reported in various newsfeeds. Documentation published by the ECB following the 1 December 2014 ERPB meeting relevant to mobile payments and the second edition of the EPC’s ‘Overview of Mobile Payments Initiatives’ are included in the ‘related links’ at the end of this article.

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EPC Latest News

EPC Plenary Meeting UpdateMain decisions taken in December 2014

29.01.15 By Javier Santamaría

The Plenary to date is the decision-making body of the European Payments Council (EPC). In this article, EPC Chair Javier Santamaría summarises the main items agreed by the EPC in December 2014. As previously reported, with the main phase of the migration to harmonised SEPA payment schemes in the euro area complete, the EPC resolved in October 2014 to adapt its current structure to further enhance governance and stakeholder involvement. In December 2014, the EPC approved its revised Charter which reflects the organisation’s new governance model. The revised Charter will be published and take effect in the first quarter of 2015 subject to procedures to be observed under Belgian law. The EPC approved the SEPA Direct Debit (SDD) Core Rulebook version 9.0 and SDD Business to Business Rulebook version 7.0 to take effect in November 2016; the second and updated edition of the ‘EPC Overview on Mobile Payments Initiatives’; and version 4.0 of the document ‘Guidelines on Algorithms Usage and Key Management’.

Key Information in this Article This article summarises main items addressed by the European Payments Council (EPC) Plenary in December 2014. The EPC approved the following documents:
  • Revised EPC Charter: in October 2014 the EPC resolved to adapt its current structure to further enhance governance and stakeholder involvement. The new EPC governance model will become operational in the first quarter of 2015 once the revised EPC Charter takes effect and the new SEPA Scheme Management Internal Rules come into force.
  • SEPA Direct Debit (SDD) Rulebooks to take effect in November 2016: the SDD Core Rulebook version 9.0 introduces a shorter standard time cycle. Both the SDD Core Rulebook version 9.0 and SDD Business to Business (B2B) Rulebook version 7.0 have been amended to simplify the use of sequence types. Exceptionally, the EPC resolved to publish the SDD Rulebook versions to take effect in November 2016 in January 2015. This decision was made to give payment service providers participating in the SEPA payment schemes an extended lead-time to implement principal changes incorporated in the SDD Core Rulebook version 9.0 and SDD B2B Rulebook version 7.0 prior to them taking effect.
  • Second and updated edition of the document ‘EPC Overview on Mobile Payments Initiatives’: this document describes various existing and new initiatives on mobile payments and aims to create awareness on the latest developments in SEPA and beyond. The first edition of the report included initiatives launched between November 2013 and May 2014. The second edition features, in addition, initiatives launched between June and October 2014.
  • Version 4.0 of the document ‘Guidelines on Algorithms Usage and Key Management’: the purpose of this technical report is to provide guidance to the European banking industry in the field of cryptographic algorithms and related key management issues. Version 4.0 of this document was updated to incorporate newsworthy developments in cryptography in 2013 and 2014.

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SEPA Compliance in the Euro Area: Get Ready for February 2016. Act Now

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Conference organized by @EU_Commission addressed #future of #EU #payments. This report highlights conclusions reached http://t.co/TaGCVcfKsL
02/03/2015
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