EPC Plenary Meeting Update

EPC Plenary Meeting Update

Main decisions taken in September 2013

30 October 13

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Outcome of the Council meeting of 23 September 2013

The Plenary addressed the outcome of the Council meeting that took place on 23 September 2013. The Council, which brings together representatives of both the demand and supply sides of the payments market, including the , was established by the European Commission and the European Central Bank (ECB) in June 2010. For more information on the Council, refer to the ‘related links’ below.

At its September 2013 meeting, the Council addressed, among other things, the progress of migration to harmonised Single Euro Payments Area ( ) payment schemes in the euro area. The European Union ( ) ‘Regulation ( ) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro’ (the Regulation) effectively mandates migration to Credit Transfer ( ) and Direct Debit ( ) in the euro area by 1 February 2014. According to the statement adopted by Council members present at the September 2013 meeting (see ‘related links’ below), the “meeting participants recognised the risks of a late migration and agreed on the need to step-up their efforts to make their constituencies migrate to and . It was highlighted that the migration requirements set by law have to be fully respected without exception. While payment service providers play a central and crucial role in migration to , end-users such as ‘big billers’, public administrations and in particular [small and medium-sized enterprises] SMEs, have their own responsibility to ensure that they are able to send and receive payments in euro also from 1 February 2014 onwards. With a view to the challenge posed by a ‘big bang’ style of migration, the Council calls for a further strengthening of communication (in particular by national public authorities) and cooperation among stakeholders. A constructive dialogue at national level between key stakeholders and competent authorities is needed to jointly address transitional issues and remaining challenges.”

With regard to governance, the Council statement points out: “Meeting participants welcomed the ECB’s commitment to establish and chair the Euro Retail Payments Board ( ) as successor of the Council and the European Commission’s commitment to actively participate in it. The objective of the would be to contribute to and to facilitate the creation of an integrated, competitive, innovative and level-playing field market for euro retail payments in the . The meeting participants took positively note of the ambition that the should achieve a wider membership, strengthened mandate and a more output-driven approach. The foreseen interaction of the with the national retail payment committees was welcomed. It was also acknowledged that the application of the competition rules at and national level and the rights and competence of the ECB, the National Central Banks, the European Commission and the European co-legislators [the European Parliament and the Council of the representing Member States] shall not be affected by this new body.”

The Council also addressed next steps with regard to an Fixed Amount Scheme; i.e. a direct debit instrument for authorised transactions of a fixed amount without a refund right. For more information, refer to the Council statement and the article, entitled: ‘Latest Developments with regard to Payment Schemes: and Change Cycle 2014/2015, Clarification Letter on Electronic Mandates and Next Steps on Fixed Amount’ in this edition of the Newsletter (see ‘related articles in this issue’ below).

The Council conclusions on the use of electronic mandate solutions under the Schemes are detailed in the next section of this article.

clarification letter on electronic mandates

The Plenary resolved to issue a clarification letter on electronic mandates (see ‘related links’ below) to payment service providers ( ) participating in the Schemes. It is widely recognised that the efficient handling and the acceptance of electronic mandates is a very important element in the context of a successful migration to and for the further development of the and Business to Business (B2B) Schemes. A mandate is signed by the debtor (payer) to authorise the creditor (payee) to collect a payment and to instruct the debtor’s payment service provider to pay those collections. On 2 October 2013, the published this clarification letter, which addresses the current uncertainty among scheme participants; i.e. that have formally adhered to the Schemes, and other interested parties around the question of acceptance of electronic mandate solutions under the Rulebooks. The clarification letter highlights that the signature methods as described in section 4.1 of the and B2B Rulebooks are not exhaustive. scheme participants may consider allowing continued usage of other legally binding methods of signature including those that were used under the local legacy scheme rules.

This matter was also addressed by the Council at its 23 September 2013 meeting. The Council statement, which was adopted by Council members present at the September 2013 meeting (see ‘related links’ below), says: “The meeting participants took positive note of the ’s intention to come forward with a clear message that the Rulebooks are not an obstacle for the continued usage, after 1st February 2014, of existing valid electronic mandates methods which are currently used in some national communities to initiate national [direct debit] DD transactions. They also took positive note of the guidance provided by German authorities (Deutsche Bundesbank and Federal Ministry of Finance) that the current national e-mandate practice can continue being used for transactions. The meeting participants welcomed this constructive approach by the relevant competent authorities and the as scheme owner, but also called for the development and adoption of common pan-European solutions in the medium term, which shall be in line with relevant -wide legal provisions and the [ ] Rulebooks.”

Approval of updated version of the document ‘Guidelines on Algorithms Usage and Key Management’ for publication on the Website

The document ‘Guidelines on Algorithms Usage and Key Management’ (see ‘related links’ below) provides guidance to the European banking industry in the field of cryptographic algorithms and related key management issues. It is a helpful tool for security officers, risk managers, system engineers and systems designers. It includes recommendations from the on algorithm usage and key management issues that may consider together with applicable security policies as well as professional or national regulation they have to comply with. This technical report recommends the use of international standards where appropriate. It also addresses the points that should be considered whenever wish to provide interoperable services based on cryptographic mechanisms. The latest version 3.0 of this technical report was updated to reflect developments in cryptography in the years 2012/2013.

Croatian Banking Association joins the

On 1 July 2013 Croatia joined the . currently consists of the 28 Member States plus Iceland, Norway, Liechtenstein, Switzerland and Monaco. On 26 September 2013, the welcomed the Croatian Banking Association as a new member. members represent banks, banking communities and payment institutions. More than 360 professionals are directly engaged in the 's work programme, representing organisations of all sizes and sectors of the European banking industry. The ECB acts as an observer in all working and support groups and in the Plenary.

Javier Santamaría is the Chair of the .


Related links:

SEPA Council Statement of 23 September 2013 Meeting

SEPA Council Page of the European Central Bank

EPC Website: EPC Publishes Clarification Letter on Electronic Mandates

EPC Document: Guidelines on Algorithms Usage and Key Management


Related articles in this issue:

SEPA 2014 - the European Central Bank Reiterates: "Everybody Has to be Ready on 1 February 2014 or Risk Disruptions in Their Individual Handling of Payment Orders." European Central Bank publishes second SEPA migration report and warns against risks of 'Big Bang' migration scenario

SEPA 2014 - the State of Play (October 2013): a Large Majority of Stakeholders Are Expected to Meet the 1 February 2014 Migration Deadline. Late Movers Must Catch Up. Now. The most significant risk to business operations is non-compliance, i.e. failure to meet the SEPA migration deadline applicable in the euro area mandated by EU law


Related articles in previous issues:

Newsletter: Articles Published in the Section ‘EPC Latest News’. Each edition of the EPC Newsletter reports on main decisions taken by the EPC Plenary

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