EPC Newsletter Issue 5 - January 2010
Analysing the expectations surrounding the concept of e-SEPA, this edition clarifies the role and the scope of the EPC in this context and gives an update on EPC work in progress with regard to the SEPA e-Payments Framework and the development of mobile channels to make SEPA payments. Taking a look beyond the scope of the EPC, this edition also examines the latest developments in the area of e-Invoicing and the benefits inherent to the dematerialisation of business processes along the entire supply chain. • In addition: the latest findings as regards SEPA readiness in the corporate and public sectors are featured. • The December 2009 ECOFIN conclusions on setting an end date for migration to SEPA are put into perspective. • Last but not least: the "EPC White Paper on mobile payments" is out for consultation and the EPC has kicked off the SEPA Scheme Change Management Cycle 2010. Get involved - your opinion matters!
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Focus: SEPA and beyond
Everybody loves E!The role of the EPC in the creation of e-SEPA
28.01.10 BY Gerard Hartsink
The concept of e-SEPA commonly refers to innovations in payments and other areas leveraging the SEPA infrastructure. Analysing the prevalent expectations surrounding e-SEPA, Gerard Hartsink clarifies the role and the scope of the EPC in this context and gives an update on EPC work in progress as regards the SEPA e-Payments Framework and the development of mobile channels to make SEPA payments.
Read moreFocus: SEPA and beyond
The big PictureDematerialisation of business processes - in payments and beyond
28.01.10 BY Peter Potgieser
The implementation of innovative electronic SEPA payment services based on global ISO standards streamlines making and receiving payments domestically or across the 32 SEPA countries. A payment, however, is only one of the last steps in the process of exchanging goods and services. Dematerialisation of the business processes underlying trade, i.e. replacing paper-based procedures with standardised electronic solutions, transcends SEPA (as well as the scope of the EPC) and requires harmonisation in several areas other than payments. Peter Potgieser argues that interoperability of such solutions currently being developed would significantly boost customers' readiness to embrace them whilst taking the concept of Straight-Through-Processing (STP) to a new level. He identifies the main developments taking place and calls on individual standard-setting bodies as well as service providers to adopt a broad perspective when designing solutions for specific interfaces linking the actors involved in a trade transaction. The concept of Straight-Through-Processing (STP), in his view, needs to be extended to cover the entire supply chain.
Read moreEPC Latest News
SEPA Scheme Change Management Cycle 2010Suggestions for changes must reach the EPC by end February 2010
28.01.10 BY Herman Segers
The SEPA Schemes will evolve over time to reflect changes in market needs and updates in standards. Each SEPA Scheme Rulebook (SEPA Credit Transfer, SEPA Core Direct Debit and SEPA Business to Business Direct Debit) contains in Annex the Scheme Management Internal Rules that define the change management process applicable to the Rulebooks. The first step in the annual SEPA Scheme Change Management Cycle is the introduction of suggestions for changes to the Schemes by any interested party. The EPC invites stakeholders to submit suggestions for changes to the EPC by 28 February 2010 (a link to the relevant documentation is included at the end of this article). Herman Segers explains the process.
Read moreOpinion and Editorial
SEPA Survey 2009: Corporate Readiness on the RiseThe findings confirm that early movers have everything to gain
28.01.10 BY Eddy Ouwendijk and Joris Barbas
The "SEPA Readiness Survey 2009" by Deloitte focusing on the corporate sector finds that SEPA readiness has significantly increased compared to 2008. The Survey shows that those corporates which have a dedicated SEPA team and strategy in place are already deriving significant benefits from implementation. At the same, the majority of companies now identify SEPA not only as a compliance issue, but also as a business opportunity. Based on the survey results, Eddy Ouwendijk and Joris Barbas predict: preparation is everything and early movers will make the most of it.
Read moreOpinion and Editorial
Clarity and Incentives neededECOFIN conclusions of December 2009 on setting an end date for migration to SEPA
28.01.10 BY Gerard Hartsink
On 2 December 2009, the ECOFIN (Economic and Financial Affairs Council - comprising the Economics and Finance Ministers of the EU Member States) concluded that "establishing definitive end-dates for migration [to SEPA Credit Transfer and SEPA Direct Debit] would provide the clarity and the incentive needed by the market, ensuring that the substantial benefits of SEPA are rapidly achieved and that the high costs of running both legacy and SEPA products in parallel can be eliminated". The ECOFIN therefore invited the European Commission, in collaboration with the ECB and in close cooperation with all actors concerned, to carry out a thorough assessment of whether legislation is needed to set binding end dates for migration to the SEPA Schemes and to come up with a legislative proposal should this assessment confirm the need for binding end dates. Gerard Hartsink comments on the ECOFIN conclusions of December 2009 with regard to the Single Euro Payments Area and reiterates: no end date, no SEPA.
Read moreSEPA Direct Debit
Optional SEPA Direct Debit Scheme in the PipelineAdditional SDD Scheme provides maximum planning security to consumers and billers
28.01.10 BY Javier Santamaría
Based on feedback received during the public consultation leading to the release of the SEPA Scheme Rulebooks to take effect in November 2010 the EPC decided to develop a separate optional SEPA Direct Debit Scheme. The new optional SDD Scheme will apply the default regime defined in the Payment Services Directive (PSD) with regard to refund rights; e.g. the refund right is excluded in cases of authorised transactions when the exact amount of the direct debit collection is agreed between the debtor (payer) and the creditor (payee). This option is contingent upon the debtor and the creditor having agreed the exact amount and the frequency of collections in the mandate. The option to exclude the refund right as specified above will be the only feature different from the SDD Core Scheme. The difference with regard to the refund rights for authorised transactions will be clearly highlighted in the mandate underlying a related direct debit collection under the new optional SDD Scheme to avoid misuse of the feature. Javier Santamaría explains the rationale for the development of this new optional scheme which is envisaged to go live in November 2010.
Read moreSEPA Standards
SEPA to goEPC White Paper on mobile payments: consultation is going on now
28.01.10 BY Dag-Inge Flatraaker
Mobile phones have achieved full market penetration and rich service levels throughout the EU, making the mobile channel an ideal launch pad for SEPA payment instruments. The EPC is therefore developing the mobile channel as an initiation channel for SEPA payments. To achieve a common understanding on mobile payments amongst all market participants and to make known the specific activities of the EPC in this context the EPC has released the "White Paper on mobile Payments" for consultation. Dag-Inge Flatraaker highlights the role of the EPC in the process of exploring the new mobile ecosystem leveraging the SEPA infrastructure and sums up the objectives of the white paper. Stakeholders are invited to forward comments by 15 February 2010 (links to the relevant documents are included at the end of this article). A final version of the White Paper is expected to be published by April 2010.
Read moreSEPA Market Uptake
Facing the Facts in January 2010The EPC Newsletter tracks the progress of SEPA implementation
28.01.10 BY Herman Segers
To allow all parties concerned, including the business community, public administrations, banks and the political drivers of the SEPA initiative to track the progress of SEPA roll-out, the EPC Newsletter provides the latest data available on the subject. In addition, the EPC Market Uptake Report keeps an eye on the availability of measures put in place by public authorities to facilitate the change-over for customers. Last but not least, the debate on setting an end date for migration to SEPA is tracked. Whilst recent indicators regarding SEPA readiness in the corporate and public sectors are encouraging, the rate of actual market uptake as of January 2010 remains essentially unchanged compared to previous reports in this Newsletter. Herman Segers has the facts.
Read moreFocus: SEPA and beyond
Food for ThoughtThe EC Expert Group on e-Invoicing Final Report
28.01.10 BY Charles Bryant
After two years work, the European Commission Expert Group has published its final report with six key recommendations on ways to encourage the mass adoption of e-Invoicing. These include meeting the needs of SME's as a priority; regulatory reform; encouragement of interoperability; standardisation; and organising and communicating the benefits. Bankers have played a key role in the work and the findings are sensitive to the potential role of banks and the opportunity represented by e-Invoicing as a new service proposition linked to payments and supply chain finance. Whilst e-Invoicing is outside the scope of the EPC, it is recognised that there is a strong linkage between e-Invoicing and the SEPA initiative. Charles Bryant outlines the main recommendations of the Expert Group and concludes: a bank interested in transforming itself from a classical payments processor into a financial supply chain services provider will need to consider carefully the opportunities now in view.
Read moreEPC Latest News
Update EPC Plenary MeetingsMain decisions taken in December 2009
28.01.10 BY Gerard Hartsink
The European Payments Council (EPC) is the coordination and decision-making body of the European payments industry. Decisions of the EPC are taken by its Plenary which consists of 76 members comprising banks and banking associations representing all banks and other payment service providers in 32 SEPA countries. The Plenary convenes four times annually. Gerard Hartsink reports on the main decisions taken at the December 2009 EPC Plenary meeting including, amongst others, approval of updated versions of the SEPA Cards Framework and the SEPA Cards Standardisation Volume - Book of Requirements and the development of a new optional SEPA Direct Debit Scheme. The latter will apply the default regime established by the Payment Services Directive (PSD) with regard to authorised transactions.
Read moreEPC Latest News
The EPC Shortcut Series: continuedThree new EPC publications highlight key concepts of a SEPA for Cards
28.01.10 BY Meral Ruesing
The EPC Shortcut Series is part of the material made available by the EPC to inform market participants about the SEPA process and related EPC deliverables. The two-page flyers released in the Shortcut Series ensure easy access to key SEPA concepts and are the ideal starting point to explore different aspects of the SEPA programme. In January 2010, the EPC released three new Shortcuts outlining the SEPA Cards Framework (SCF) developed by the EPC, the principles underlying SEPA Cards Standardisation and the ten best reasons for merchants to practice SEPA, respectively.
Read moreOpinion and Editorial
Expectations are promising (and Patience is a Virtue)Results of the Second Annual Progress Report on the state of SEPA migration in 2009
28.01.10 BY Zuzana Kalivodova and Gerd Heinen
The Second Annual Progress Report was prepared by the Commission services, in close cooperation with the ECB, in the frame of the SEPA migration review process initiated by the Economic and Financial Affairs Council (ECOFIN) and provides an update on important SEPA-related developments in 2009. The ECOFIN Council welcomed this Progress Report at its meeting of 2 December 20091. The report provides a snapshot of the migration status of SEPA two years after its launch and identifies important developments for each SEPA payment instrument, highlighting especially the launch of the SEPA Direct Debit Schemes (SDD) in November 2009. Particular attention is paid to the migration of public administrations because of the crucial role they can play in achieving a critical mass of SEPA payments. Whilst the latest findings indicate that commitment to SEPA among public administrations is on the rise, the actual rate of migration to SCT in the public sector remained low during the reporting period. Zuzana Kalivodova and Gerd Heinen have the details.
Read moreOpinion and Editorial
Nowhere to go but forwardFringe observations on the Single Euro Payments Area
28.01.10 BY Javier Santamaría
The EPC Newsletter introduces a "speaker's corner" featuring the voices of EPC members that are delivering SEPA services to customers. Their commentaries highlight aspects transcending the day-to-day management of the process aimed at making SEPA a reality in the foreseeable future. Kicking it off, Javier Santamaría reflects on how to get the thrill back into the programme and all players on board. In his view, three measures are necessary: bring market conditions back into the process; build a credible argument for SEPA based on substantiated data rather than wishful thinking and convince all stakeholders (not only banks) to take ownership of the programme.
Read moreSEPA for Cash
The Road ShowEC expected to harmonise rules for cross-border cash transport by road
28.01.10 BY Leonor Machado
As reported previously in this Newsletter, the EPC advocates the creation of a Single Euro Cash Area (SECA) with a view to increase the efficiency of the wholesale cash processing cycle; e.g. the processes required to put euro banknotes and coins in circulation and to transport them. In SECA, as envisioned by the EPC, cash-in-transit companies (CITs) should be able to establish cross-border cash transporting routes. However, eight years after the introduction of euro coins and banknotes CITs continue to operate exclusively within national boundaries due to existing differences between related legal regimes in Member States. To remediate the situation, the European Commission intends to introduce a proposal for a Regulation on cross-border euro cash transport by road during the second quarter of 2010. Leonor Machado reports on a set of principles developed by the EPC with a view to ensure greatest possible effectiveness of legislation in this matter.
Read moreLegal and Regulatory Issues
PSD in PracticeDiscrepancies in national transposition pose a challenge to banks
28.01.10 BY Ruth Wandhöfer
On 1 November 2009 the Payment Services Directive (PSD) has come into force in 21 EU/EEA Member States. Whilst it is expected that the nine countries which missed the transposition deadline will follow suit shortly, for the time being banks are required to deal with the fact that differing legal regimes remain in place throughout SEPA. Ruth Wandhöfer provides an update on the PSD transposition status by country and introduces recommended best practices on how to manage the situation during the interim period until transposition is finalised in all Member States. In addition, first experiences gathered in the new PSD environment - possibly pointing to the need of further clarification as regards certain key provisions - are shared.
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