On 19 December 2013, the European Central Bank (ECB) announced the launch of the Euro Retail Payments Board (), to help foster “the development of an integrated, innovative and competitive market for retail payments in euro in the EU”. The ’s work consists mainly of identifying strategic issues and work priorities (including business practices, requirements and standards) and ensuring they are addressed. Seven representatives from the demand side (e.g. consumers, retailers and corporations) and seven from the supply side (banks, payment and e-money institutions) sit on the Board. They are joined by five representatives from the euro area national central banks and one representative from the non-euro area EU national central banks (all on a rotating basis). The is chaired by the ECB. The European Commission (EC) participates as an observer. The European Payments Council () is a member of the . At the ’s third meeting held on 29 June 2015, next steps were agreed with regard to the following topics: instant payments in euro, person-to-person () mobile payments, technical standards relating to payment cards and e-invoicing payment issues. Documentation relating to these topics published by the ECB following the third meeting is included in the ‘related links’ below.
Instant payments in euro
In response to an invitation extended by the on 1 December 2014, Anthony Richter, chair of the ad hoc task force mandated to prepare the ’s recommendations on instant payments, presented the report to the (see ‘related links’ below). In this presentation, which was clearly introduced as a contribution from one stakeholder among many represented at the , the outlined the outcome of its preliminary analysis, its recommendations as well as three conditions which must be met in its opinion before any further steps can be taken on instant payments:
- The full involvement of all stakeholders, starting with the creation of an working group, to discuss the issues raised by the report (e.g. the ‘go to market’ scenarios).
- The clear understanding that a ‘ Credit Transfer instant scheme’ (SCTinst) would be only one payment instrument of several possible instruments which support instant payment solutions.
- Clarity from the Eurosystem about the evolution of its settlement infrastructure and processes in terms of whether, how and when it could support an end-to-end instant payment environment.
The welcomed the report as “an important step towards achieving pan-European instant payments in euro” (see ‘related links’ below) and agreed the following:
- “That irrespective of the payment instrument on which they are based, instant payment solutions offered to end-users in euro should be developed at the pan-European level or, if developed at the national level, should at least be interoperable with those solutions based on the same payment instrument;
- to invite the to present to the , by November 2015, a proposal for the design of an instant (SCTinst) in euro, which could be adhered to by EU payment service providers on a voluntary basis;
- to call for the creation of a group that reflects the composition of the at the level of alternate members to offer guidance as needed to the regarding the development of the SCTinst in the period from July to November 2015.”
As a result, the will prepare the agreed proposal in close liaison with an multi-stakeholder ‘High Level Group’ which will provide guidance to the and monitor progress.
The High Level Group on instant payments held its first meeting on 17 July 2015 to discuss next steps in relation to the Scheme for instant payments. During this meeting, the presented its preliminary thoughts on the position and scope of the SCTinst which can be summarised as follows:
- The Scheme would be separate to the existing Scheme.
- It would support a competitive initiation layer.
- It would be based on clearing and settlement layers.
- Scheme membership would be open to any but it would not be mandatory.
- Scheme Rulebook adherence would be mandatory for those who join.
- Scheme participants would participate as both sender and receiver.
- A rulebook would be created to cover interbank clearing and customer-to-bank and bank-to-customer relations.
- Other instant payment -based schemes would need to be interoperable with the SCTinst.
- Indirect participants to the scheme will be able to fulfil scheme requirements.
The meeting also identified and debated about some potential issues relating to the SCTinst, including implementation, timespan, availability, value dating outside of business hours, erroneous and fraudulent instant payments and regulatory aspects. The report to be submitted for the meeting of November 2015 will show how these issues may be resolved. The has committed to providing a proposal for an SCTinst design for the November 2015 meeting and also outlined a proposed timeline from inception to delivery of an SCTinst Rulebook. Updates regarding meetings and with regard to delivery of further feedback and recommendations can be expected in due course.
Person-to-person mobile payments
In response to recommendations from a report provided by the working group on mobile payments, the members of the subsequently agreed to “endorse the vision of allowing any person to initiate a pan-European mobile payment safely and securely, using a simple method with information the counterparty is prepared to share in order to make a payment.” It continued by agreeing:
“In particular, payment service providers () offering mobile payment services should make use of existing infrastructure as far as possible (i.e. payments and international bank account numbers (IBANs)). Moreover, a harmonised process should be created to allow mobile payment data (e.g. mobile phone numbers or email addresses and IBANs) to be exchanged between local solutions across borders.”
The has also expressed its expectation that the existing and future local mobile solutions cooperate to ensure pan-European interoperability and has invited the to facilitate this.
Technical standards relating to payment cards
The next reviewed a detailed report on the market initiatives to develop technical standards (“implementation specifications”) delivered by the Cards Stakeholders Group (CSG), a multi-stakeholder group of which the is a member.
The agreed with the CSG report’s findings, responding “that in the terminal-to-acquirer and card-to-terminal domains, the choice of implementation specifications should be market driven and conform to the Cards Standardisation Volume (SCS Volume). In the terminal security domain, terminal security certification methodologies, processes and certification frameworks should implement the relevant list of requirements described in the SCS Volume.” The then invited the CSG to:
- “implement the relevant procedures and start to monitor the conformance of implementation specifications for payment card products and services to the SCS Volume in the second half of 2015;
- perform a study at the European level to evaluate any interest and benefit of the migration to a single message standard and standardised clearing/settlement practices in the issuer-to-acquirer domain;
- report back to the every 12 months with an update on the stock-taking exercise concerning the progress of the implementation of harmonised standards relating to payment cards in Europe.”
E-invoicing payment issues
Finally, on the basis of a note prepared by the Secretariat, the endorsed the objective of a harmonised electronic invoice/bill presentment & payment (EIPP/EBPP) service for payers and payees, and an electronic invoicing/billing network for payees to reach all consumers and businesses in Europe. The members of the took note of the preliminary assessment of existing barriers to the implementation of pan-European EIPP/EBPP solutions and agreed to continue work on this dossier with the aim to conclude on next steps in the meeting of the in November 2015.
The shares the overall vision articulated in the note prepared by the Secretariat. The also subscribes to the view that the topic should form part of a broader, end-to-end perspective and be linked to the recently announced EC ‘Digital Single Market’ initiative as well as to previous work carried out at EC level.
Activity following the meeting
The stands ready to continue its active contribution to the objectives and work of the as well as to the implementation of the agreed upon recommendations, with the full involvement of all other stakeholders.
Javier Santamaría is the Chair of the .
European Central Bank Website: ERPB Statement 29 June 2015
European Central Bank Website: ERPB Statement 1 December 2014
European Central Bank Website: Information about Euro Retail Payments Board (ERPB)
News: EPC Publishes Report on Instant Payments After Submission to the June 2015 Meeting of the Euro Retail Payments Board
Blog: Update on work items addressed by the Euro Retail Payments Board (ERPB) chaired by the European Central Bank: SEPA Credit Transfer, SEPA Direct Debit, instant and mobile payment
Related articles in this issue:
Instant Payments at Point of Sale – Overcoming Customer and Merchant Barriers
Realising the European ‘Payments Dream’
A Corporate View on Instant Payments
Highlights of EPC Report to the Euro Retail Payments Board on Instant Payments
Related articles in previous issues:
EPC and Cards Stakeholders Group Released Version 7.05 of the SEPA Cards Standardisation Volume for Public Consultation ( Newsletter, Issue 26, April 2015)
Instant Payments – a Winning Bet? ( Newsletter, Issue 26, April 2015)
The Future of Payments: European Commission Invited Exchange of Views at its Conference on Emerging Challenges in Retail Finance and Consumer Policy ( Newsletter, Issue 25, January 2015)
Next Steps Agreed by the ERPB with Regard to SCT and SDD Post-migration Issues, pan-European Electronic Mandate Solutions and Instant Payments ( Newsletter, Issue 25, January 2015)
New ERPB Working Groups on Mobile Payments and Publication of the Second Edition of the EPC's ‘Overview of Mobile Payments Initiatives’ ( Newsletter, Issue 25, January 2015)
EPC Publishes Overview of Mobile Payments Initiatives in SEPA and Beyond ( Newsletter, Issue 23, July 2014)
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