Clarifying the role of the in the process
One of the objectives of the Annual Report 2009 is to facilitate a clear understanding of the role of the in the process. The develops the payment schemes and frameworks necessary to realise . The is not responsible for the over-all management of the process.
The purpose of the is to promote the Single Euro Payments Area (). The defines common positions, provides strategic guidance for standardisation, formulates rules, best practices and standards and supports and monitors implementation of decisions taken. The consists of 76 members representing banks, banking communities and payment institutions. More than 300 professionals from 32 countries are directly engaged in the work programme of the , representing all sizes and sectors of the banking industry within Europe.
The is responsible for the development and maintenance of payment schemes as defined in the Credit Transfer Scheme Rulebook and the Direct Debit Scheme Rulebooks. The Scheme Rulebooks and corresponding Implementation Guidelines describe sets of rules and standards that have to be observed by payment service providers when executing payment transactions. The Rulebooks provide a common understanding between banks on how to move funds and remittance information (maximum 4 x 35 characters) from account A to account B within .
The rules and standards which make up a payment scheme are defined by banks in a collaborative space - that is the . The particular payment products and services offered to the customer are developed by individual banks or groups of banks operating in a competitive environment. Provided that scheme rules and standards are respected, payment service providers are free to add features and services of their choice to the actual payment product.
The delivers key elements required to achieve : the Credit Transfer Scheme and the Direct Debit Schemes
In November 2009, the successfully launched the Core Direct Debit Scheme and the Business to Business Direct Debit Scheme. As of this date, banks throughout were gradually starting to deliver Direct Debit services to their customers. All branches of banks in the euro area must be reachable for Core Direct Debit by 1 November 2010 as mandated by the EU Regulation on cross-border payments in the Community.
Also in November 2009, the released updated versions of the Scheme Rulebooks including new mandatory and optional elements which reflect further customer requirements as identified during the annual three month public consultation.
data formats: recommendations on the reporting of transactions by banks to their customers
The realisation of requires agreement on a common set of data to be exchanged in a common syntax. The data formats specified by the for the exchange of payments represent such a common data set. The data formats are a subset of the ISO 20022 message standards. Following release of enhanced Implementation Guidelines for the customer-to-bank communication, in 2009 the approved recommendations on the reporting of transactions by banks to their customers allowing for fully automated Straight-Through-Processing of transactions along the entire process chain (customer-to-bank; bank-to-bank; bank-to-customer).
Extended character set solution supporting the use of any characters existing in the languages when making payments
Part of a payment instruction is information facilitating reconciliation of the payment on the side of the receiving party such as the name of the payer or the reason for payment. The Schemes require such information to be provided using Latin characters, unless banks agree to accept other characters as well (ä, à, ñ, for example). To allow unrestricted communication between bank customers (and their banks) across 32 countries, the has developed - based on ISO and UNICODE character set standards - an extended character set solution that supports the use of any characters existing in the languages. The aim is to have a consistent way of handling an extended character set catering for national language requirements to minimise any related rejects and other return transactions.
Online and mobile payments
In response to changing customer habits, significant progress was achieved in the design of the e-Payments Framework facilitating online payments with a payment-guarantee for web-retailers followed by a Credit Transfer. In addition, the Roadmap for Mobile Payments approved in March 2009 spells out the main deliverables in the areas of card proximity payments and card mobile remote payments.
for Cards: promoting the use of open standards
The aim of creating a for Cards is to ensure a consistent customer experience at a very high level of security when making (consumers) or receiving (merchants) card payments throughout . The for Cards will be achieved to the greatest extent possible through the use of open standards, available to all parties within the card payment value chain. In 2009, the together with representatives of the main sectors also active in the cards domain including retailers, vendors, processors and card schemes established the Cards Stakeholders Group (CSG). The CSG is mandated to progress the Cards Standardisation Volume - Book of Requirements. In 2009, the published an updated version of the Volume addressing card-not-present transactions.
Single Euro Cash Area (SECA): moving to a less-cash society
The continues to push for a Single Euro Cash Area (SECA) seeking, amongst other objectives, to increase the efficiency of the wholesale cash processing cycle; e.g. the processes required to put euro bank notes and coins in circulation and to transport them. The closely monitors implementation of the roadmap defined by the European Central Bank / Eurosystem in support of the SECA objectives. In addition, the developed a set of recommendations with a view to ensure greatest possible effectiveness of a regulation on cross-border euro cash transport by road. It is expected that the European Commission will introduce a related proposal in the second quarter of 2010.
Latest findings confirm: early movers have the most to gain
The Annual Report confirms that it is now the time for the political drivers of the project to incentivise market transition to the payment instruments. Public administrations - accountable for up to 20 per cent of electronic payments made in society - must speed up implementation. Moving public sector payments to will create critical mass and trigger implementation by other market participants. As of end 2009, however, the public sector continued to lag behind even the modest average of uptake across the Member States.
The " Readiness Survey 2009" (Deloitte), by comparison, finds that readiness has significantly increased in the corporate sector compared to 2008. The Survey shows that those corporates which have a dedicated team and strategy in place are already deriving significant benefits from implementation. At the same time, the majority of companies now identify not only as a compliance issue, but also as a business opportunity. The survey results demonstrate that early movers have most to gain. It is hoped that the public sector will absorb this lesson sooner rather than later.
Call to action: setting a deadline for migration to
The Annual Report 2009 demonstrates the continued commitment of the European payments industry to making a reality. The successful conclusion of this harmonisation exercise requires action by all stakeholders. The welcomes the fact that the EU Finance Ministers represented in the Economics and Financial Affairs Council - ECOFIN - recognise that setting a deadline for migration to the payment instruments provides the clarity and the incentive needed by the market; will ensure that the substantial benefits of are rapidly achieved and that the high costs of running both legacy and products in parallel can be eliminated. The reiterates: a transformation process of this dimension must be transparent and predictable for all market participants. Mandating an EU-wide end date requires EU Regulation.
Gerard Hartsink is the Chair of the European Payments Council.
EPC Annual Report 2009 (This report is no longer available online).
Related articles in this issue:
Related articles in previous issues:
Expectations are promising (and Patience is a Virtue). Results of the Second Annual Progress Report on the state of SEPA migration in 2009 (EPC Newsletter, Issue 5, January 2010; this article in particular reflects migration to SEPA in the public sector)
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