- The Austrian banking community has developed a set of e-services for payments. What exactly are these services and how do they fit in the European context?
Our e-services family consists of three products. The e-payment ‘eps’ (for ‘Electronic Payment Standard’) has been on the market for several years and is well established. It works with an instant message exchange between buyer and merchant followed by a Credit Transfer () and is fully compliant with European Payments Council () rules and regulations.
Direct debits are very popular in Austria. Large creditors like insurance corporations, telecom providers or companies offering utility or public transport services have started to sell online. In order to save them the cumbersome task of confirming both the contract and mandate for a direct debit by mail, two new e-services have been developed:
- the e-Identity service confirms the correctness of the customer data by comparing it with the data stored by the bank with the payment account, and
- the e-Mandate service provides a signed electronic direct debit mandate to the creditor that is fully compliant with the rulebook.
Both services use the e-payment infrastructure and present the information to the customer in his online banking application. These two services are being implemented and we expect to reach full market coverage by year-end.
At present, both the e-Identity and the e-Mandate service only work within Austria, whereas the e-payment ‘eps’ can also be used cross-border, because it is interoperable with the German e-payment system ‘Giropay’.
- STUZZA has defined a QR code for the initiation of a Credit Transfer, which has been adopted by the . What was the reason for this and how does it work?
The migration to e-invoices is still at an early stage, and with the exception of the Austrian public authorities, who decided in 2014 to accept only e-invoices, their use isn’t very common in Austria. So, when initiating a credit transfer to pay the amount of a paper invoice, all the required data has to be keyed in by the payer.
If, however, the seller prints a QR code on the invoice with this data, the payer may scan the code by using his bank’s e-banking app and the payment details are filled in automatically. Alternatively, he can scan the QR code at a self-service terminal in his bank branch. After verifying the details, the payer authorises the transaction to complete the payment process.
By now, the majority of Austrian banks support the QR code, both via smartphone and in their branch offices.
- Card payments are the most popular cashless payment method in Austria. Their proportion among all cashless transactions is, however, lower than the average ratio of card payments in the (nearly 38 percent in Austria vs. 47 percent in the ). What is the state of play of cash – whose global share in the is being eroded by cards – in Austria? How has the share of cash payments evolved in recent years? Is Austria striving for its decrease?
While the number of credit transfers and direct debits has been decreasing slightly in recent years, card payments are constantly increasing at a rate of close to ten percent every year. We expect this trend to continue. The implementation of contactless (Near Field Communication or NFC) card payments in combination with payments without PIN for amounts of up to 25 euros has been well accepted by the market. By the end of 2016, about 9.5 million debit cards had been issued, of which 8.4 million (88 percent) support contactless payments. The total number of contactless payments grew by around 300 percent last year, reaching 92 million.
Although Austria is not actively pursuing the idea of a cashless society, stakeholders – in particular retailers – realised that cashless payments are more convenient, safer and overall more efficient than cash transactions. So several initiatives have been started to reduce the share of cash payments, the most successful being contactless card payments. As a consequence, the number of cash payments is constantly decreasing: from more than 70 percent of retail payments a couple of years ago to 60 percent last year.
- Austria is one of the European countries where direct debits are most popular. How do you analyse the Austrians’ appetite for direct debits? What kind of purchases are direct debits used for in Austria?
Direct debits are certainly a popular payment method in Austria and have been so for decades. Alongside card payments and credit transfers, direct debits represent the third pillar of Austrian cashless payments. Comparing Austrian to European numbers, we can see that in Austria direct debits represent 27 percent of cashless payments, as opposed to 21 percent on EU average.
Direct debits have proven to be a very reliable, convenient and secure payment method for creditors as well as debtors. The sectors using direct debits most are property management, utilities and telecoms.
- What is the position of the Austrian payment community regarding the Instant Credit Transfer scheme? Do Austrian banks plan to adhere to this new optional scheme, and if so what would be the timeframe for adoption?
The Austrian banking community welcomes the Instant Credit Transfer scheme as we are convinced that a joint European approach is required to make this development a success.
Several Austrian banks have already started their projects and plan to adhere to this scheme in the first quarter of 2018. Further activities are in discussion and will also depend on European initiatives (e.g. European Central Bank).
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