Facing the Facts in April 2009

Facing the Facts in April 2009

EPC tracks progress of SEPA implementation

19 March 10

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Percentage of banks in offering services

As of April 2009, nearly 4500 banks in 31 countries offer Credit Transfer ( ) services for euro payments. The payments services providers offering services today represent roughly 95 percent of payment volume in Europe.

Percentage of transactions compared to total volume generated by customers

According to the Indicators compiled by the European Central Bank, in February 2009 (latest data available) the share of Credit Transfers as a percentage of the total volume of credit transfers generated by bank customers amounted to about 1.9 per cent. The ECB Indicators are publicly accessible at http://www.ecb.int/paym/sepa/timeline/use/html/index.en.html. A figure of 100 per cent would indicate that only services are used and have fully replaced the non- instruments.

The Indicators are based on aggregated data provided by clearing and settlement infrastructures in the euro area processing transactions. These data exclude transactions sent for example via links between infrastructures to avoid double-counting. The data also exclude "on-us" transactions ( credit transfers between accounts at the same bank) as well as transactions cleared between banks bilaterally or via correspondent banking.

The Score Board: monitoring implementation by public administrations

is a policy-maker-driven public harmonisation initiative launched by -governments, the European Commission and the European Central Bank, designed to complete the internal market and monetary union. As a matter of principle it may therefore be expected that the public sector will act as the launching customer of the new payment services.

The first Annual Progress Report on the State of Migration issued by the European Commission, which monitors the migration rate by public authorities in the , concludes: "Since its launch, the uptake of in the public sector has been very limited." Many public administrations responding to a related survey of the Commission reported that they either have not yet executed any , while others have used the new instrument but only to a marginal extent. For details and comments on the results of the first Annual Migration Report refer to the focus section in this Newsletter. A link to the report is provided below.

To promote implementation, the European Commission and the European Central Bank are jointly developing a Action Plan which, among others, envisages the regular publication of a score board assessing the progress achieved by national public administrations. When such a score board will be publicly available, it will be featured in the Market Uptake Reports provided in the Newsletter.

Validity of existing mandates under the Direct Debit Scheme

In any direct debit scheme, a mandate is completed by the debtor (a customer purchasing goods or services) to authorise the creditor (the provider of goods or services) to collect payments via direct debit. At the same time, a mandate usually includes the authorisation of the debtor bank to pay these collections.

To facilitate migration of customers to the Direct Debit Scheme, it is imperative that mandates existing today can be used under the scheme, even if these do not incidentally meet all the requirements of the mandate. Where necessary, Member States must device legislative solutions to ensure the continued legal validity of existing mandates under the Direct Debit Scheme.

According to the Annual Migration Report issued by the European Commission, to date the following 13 Member States have found a solution to ensure the continued legal validity of existing direct debit mandates when migrating to : Austria, Belgium, Bulgaria, Denmark, Estonia, France, Ireland, Italy, Netherlands, Portugal, Slovakia, Romania and Sweden. As of end April 2009, it remains an open question whether a legislative solution will be available in Germany where direct debits are used twice as much as in the whole of the European Union.

The has introduced rules on the use of legacy mandates under the Direct Debit Scheme into the Core Direct Debit Scheme Rulebook version 3.3 (for details see the article "Creditors: Help is here: EPC introduces rule on the use of legacy mandates under the SDD Scheme" in this Newsletter).

Measures to promote the use of IBAN and BIC

IBAN (International Bank Account Number) and BIC (Bank Identifier Code) will be the only permissible account and bank identifiers for transactions. market uptake therefore requires easily available information on IBAN and BIC of business partners and public administrations to whom payments are made. invites organisations representing bank customers and public authorities to ensure that individual businesses and government entities feature related information prominently on web sites, invoices and stationary.

The early results of a new survey being carried out by amongst its member communities confirm that the banking sector throughout is able to process payments using BIC and IBAN and is taking steps to promote the widespread adoption of BIC and IBAN. The focus now is on stimulating the payers to migrate from BBAN to IBAN and BIC. Activities being done by banks and communities include the following:

  • The banks have been printing BIC and IBAN on customer statements for some time
  • Banks provide on-line instruction about the use of BIC and IBAN on Internet home banking channels, and documentation on their websites
  • Most communities have a national website devoted to (e.g. www.sepabelgium.be) which contains a range of IBAN and BIC related items, including downloadable tools for BBAN to IBAN conversion, educational material such as guidelines, flyers, etc
  • Some communities are contemplating charging payers who fail to supply BIC and IBAN as a means of changing payers' habits.
for Cards: tracking EMV roll-out

As reported in the first issue of the Newsletter, good progress is being made in the realisation of a for cards. The latter's aim is to enable a consistent customer experience when making or accepting payments with cards. The 's Cards Framework (SCF) outlines high level principles and rules that when implemented by banks and card schemes will deliver this consistent experience. The SCF recognises the EMV standard as the technology platform for Europe-wide acceptance of payments with cards at very high levels of security. EMV stands for Europay MasterCard Visa programme to implement CHIP and PIN security for card transactions.

An important indicator on the progress in this area is the number of cards, POS (points of sale: terminals at retailers' check outs) and ATMs now in the market that require the use of PIN and CHIP for the authorisation of a card payment. More specifically, the percentage of so called EMV-compliant cards, POS and ATMs is monitored. Confirming related findings of the Cards Working Group, the Annual Progress Report on the State of Migration issued by the European Commission states that to date, EMV compliance is 62 per cent for cards, 68 percent for POS and 83 per cent for ATMs. Annex 3 o the report provides a detailed table on EMV compliance in each Member State (see link below).

Herman Segers is the Secretary General of the .

The Annual Progress Report on the State of Migration in 2008 can be found at the following Commission's web-site:



SEPA2008: Uniform Payment Instruments for Europe. Association of German Banks. 2nd revised edition. September 2008.

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