The European Payments Council () adapts its structure to further enhance governance and stakeholder involvement
With migration to harmonised Single Euro Payments Area () payment schemes in the euro area complete1, the EPC resolved in October 2014 to adapt its current structure to further enhance governance and stakeholder involvement. The primary objective of this process is to ensure that the EPC continues to be best equipped to perform its main task, i.e. to manage the SEPA Credit Transfer () and SEPA Direct Debit (SDD) Schemes, in an efficient and transparent manner. With this objective in mind, the EPC will create several new bodies responsible for managing the administration and evolution of the SCT and SDD Schemes. The EPC carries out the scheme management function subject to legal and regulatory conditions defined by the European Union (EU) authorities.
The EPC remains committed to contributing to safe, reliable, efficient, convenient, economically balanced and sustainable payments, which meet the needs of payment service users and support the goals of competitiveness and innovation in an integrated European economy. Considering that the EU authorities driving the SEPA process have clarified that migration to harmonised SEPA payment schemes does not conclude this EU integration project, the adjusted EPC structure will also facilitate developing positions on behalf of EPC members, representing payment service providers (), vis-à-vis the EU institutions, public authorities, international organisations, and the general public on European payment issues as well as on policies, legislation and regulations impacting payments.
The new EPC governance model will become operational in the first quarter of 2015 once the revised EPC Charter takes effect subject to procedures to be observed under Belgian law and the new SEPA Scheme Management Internal Rules come into force.
For detailed information, refer to the article, entitled ‘European Payments Council 2.0: with SEPA Migration (Euro Area) Complete, the EPC Adapts its Structure to Further Enhance Governance and Stakeholder Involvement. The new EPC governance model will become operational in the first quarter of 2015’ in this edition of the EPC Newsletter (see ‘related articles in this issue’ below).
The EPC approved modifications to the next generations SCT and SDD rulebooks
The evolution of the SCT and SDD Schemes, as set out in the SCT and SDD Rulebooks, reflects changes in market needs and updates of technical standards developed by international standards bodies, such as the International Organization for Standardization (ISO). Since the launch of the SCT Scheme in 2008 and the SDD Schemes in 2009, the EPC has generally published updated versions of the rulebooks and associated implementation guidelines once annually. (For more information on the scheme change management process, refer also to the EPC Website page, entitled ‘SCT / SDD Rulebook Release Management and Scheme Development’ included in the ‘related links’ below.)
The EPC approved modifications to be included with the next generations SCT and SDD Rulebooks. The EPC will publish the SCT Rulebook version 8.0, Rulebook version 8.0 and SDD Business to Business (B2B) Rulebook version 6.0 and associated implementation guidelines in November 2014. These rulebook versions will then take effect in November 2015.
For detailed information on the modifications to the next generations SCT and SDD Rulebooks, refer to the article, entitled ‘SCT and SDD Rulebooks: Modifications to the Rulebooks to Take Effect in November 2015 and November 2016, Respectively. Based on feedback received during the 2014 public consultation on changes to the rulebooks, the EPC resolved to update the release schedule applicable to the next rulebooks generations’ in this edition of the EPC Newsletter (see ‘related articles in this issue’ below).
Approval of manual on best practices in automated teller machine (ATM) cash replenishment in Europe. The manual is the result of a multi-stakeholder project involving the ATM Industry Association (ATMIA), the European Intelligent Cash Protection Association (EURIPCA) and the EPC
The EPC approved the manual ‘Best Practices in ATM Cash Replenishment in Europe’ which has been published by the ATM Industry Association (ATMIA) and the EPC. The manual endeavours to:
- Highlight that professionals in the cash value chain hold a shared responsibility to continuously review processes and methods in order to ensure this payment method is provided in a cost effective manner, delivering the service to the level of quality expected by consumers.
- Produce a comprehensive and ‘best-of-breed’ overview of best practice in terms of how to manage cash through its main distribution channel, the ATM.
- Evaluate the pros and cons of various replenishment models with a view to identifying best practice.
The manual is the result of a multi-stakeholder project involving ATMIA, EURIPCA and the EPC. The overall goal is to enhance and reduce the costs of the ATM replenishment process and staff training.
For detailed information, refer to the article, entitled ‘ATMIA and EPC Publish a Manual on Best Practices in ATM Cash Replenishment in Europe. Creating a more efficient and less costly cash handling process’ in this edition of the EPC Newsletter (see ‘related articles in this issue’ below).
The EPC approved publication of the document ‘Guidance for SEPA Direct Debit Business to Business () Scheme Mandate Confirmations’
The EPC approved the document ‘Guidance for SEPA Direct Debit Business to Business (SDD B2B) Scheme Mandate Confirmations’, which was subsequently published on the EPC Website (see ‘related links’ below). This document addresses the SDD B2B mandate confirmation requirements and operational implementation thereof prescribed in the SDD B2B Rulebook. The guidance aims to support scheme participants, i.e. PSPs that have formally adhered to the schemes, to comply with the mandate confirmation requirements defined in the SDD B2B Rulebook.
The SDD B2B Scheme enables business customers in the role of debtors (payers) to make payments by direct debit. Services and products based on the SDD B2B Scheme are only available to businesses; the debtor must not be a private individual (consumer). In the SDD B2B Scheme the debtor (a business) is not entitled to obtain a refund of an authorised transaction.
The SDD B2B Scheme requires the debtor bank, (the bank of the payer), to ensure that the collection is authorised by checking the collection against mandate information. A mandate is signed by the debtor to authorise the creditor to collect a payment and to instruct the debtor’s bank to pay those collections. The debtor bank and the debtor are required to agree on the verification to be performed for each SDD B2B collection.
This means: the debtor bank must check whether or not a valid mandate is in place prior to executing an SDD B2B collection. The debtor bank has to obtain confirmation from the debtor on the SDD B2B mandate data received as part of the first SDD B2B collection prior to debiting the debtor’s account.
The guidance document also reiterates that each SDD mandate is identifiable based on the ‘unique mandate reference’. This mandate reference is assigned by the creditor (biller). It is recommended that the creditor indeed assigns unique, i.e. distinct, mandate references to separate mandates signed by the same debtor to authorise collections under the SDD Core and the SDD B2B Schemes, respectively. The risk of not following such practice is that debtors who wish to block a collection by providing the unique mandate reference will block all other direct debits having the same mandate reference.
Last but not least, the document identifies SDD B2B mandate confirmation practices that are outside the scope of the SDD B2B Scheme.
Observing the principles reiterated with this EPC guidance document should contribute to reducing the occurrence of R-transactions under the SDD B2B Scheme triggered in the event that the debtor bank does not obtain the required mandate confirmation from the debtor. (Possible exceptions to the normal execution of a direct debit collection include, for example, returns, rejects, refusals and reversals, commonly referenced as ‘R-transactions’ and described in detail in the SDD Rulebooks.)
Javier Santamaría is the Chair of the EPC.
Related articles in this issue:
European Payments Council 2.0: with SEPA Migration (Euro Area) Complete, the EPC Adapts its Structure to Further Enhance Governance and Stakeholder Involvement. The new EPC governance model will become operational in the first quarter of 2015
SCT and SDD Rulebooks: Modifications to the Rulebooks to Take Effect in November 2015 and November 2016, Respectively. Based on feedback received during the 2014 public consultation on changes to the rulebooks, the EPC resolved to update the release schedule applicable to the next rulebooks generations
Related articles in previous issues:
EPC Newsletter: Articles Published in the Section ‘EPC Latest News’.
1 In February 2012, the European Union (EU) co-legislators, i.e. the European Parliament and the Council of the EU representing EU governments, adopted the ‘Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro’. It defines 1 February 2014 as the deadline in the euro area for compliance with the core provisions of this Regulation. In non-euro countries, the deadline will be 31 October 2016. Effectively, this means that as of these dates, existing national euro credit transfer and direct debit schemes will be replaced by SEPA Credit Transfer and SEPA Direct Debit. To avoid difficulties for non-compliant market participants, in February 2014, the European Commission, the European Parliament and EU governments agreed to “give an extra transition period of six months” during which payments which differed from the SEPA format could still be accepted in the euro area after 1 February 2014. It is important to keep in mind that, following 1 August 2014, countries in- and outside of the euro area ensure that they are ready to meet SEPA compliance requirements applicable in 2016 mandated by EU law. The SEPA Regulation has introduced several possible exemptions regarding the use of the International Bank Account Number (IBAN), the Business Identifier Code (BIC) and the ISO 20022 XML message standards by the February 2014 deadline. EU Member States have discretion as to whether they will use any or all of the options to derogate from the 1 February 2014 deadline (until 1 February 2016) with regard to the use of the IBAN, the BIC and the ISO 20022 XML message standards by payment service users. Niche products, which have been granted an exemption: the SEPA Regulation, in particular, stipulates that credit transfer and direct debit transactions with a cumulative market share of less than 10 percent in an EU Member State must comply with the provisions set out in this legislative act only by 1 February 2016. Non-euro countries will have to comply with the SEPA Regulation by 31 October 2016. For more information, refer to the EPC Blog, entitled ‘1 August 2014 Does Not Mark the End of the Migration Process. Get Ready for SEPA 2016. Act Now.’ http://www.europeanpaymentscouncil.eu/index.cfm/blog/1-august-2014-does-not-mark-the-end-of-the-migration-process-get-ready-for-sepa-2016-act-now/.
If you would like to comment on this article, please identify yourself with your first and last name. Your name will appear next to your comment. Email addresses will not be published. Please note that by accessing or contributing to the discussion you agree to abide by the EPC website Terms and Conditions.