Next generation Credit Transfer and Direct Debit Rulebooks will be published in November 2014 to take effect in November 2015. The European Payments Council invites suggestions for changes by 28 February 2014.
The European Payments Council () launched the Credit Transfer () Scheme in January 2008 and the Direct Debit () Core and Business to Business (B2B) Schemes in November 2009. The Single Euro Payments Area () payment schemes, as set out in the and Rulebooks, evolve based on a transparent change management process adhered to by the . This evolution reflects changes in market needs and updates of technical standards developed by international standards bodies, such as the International Organization for Standardization. The principles governing the evolution of the Schemes are set out in section three of the Scheme Management Internal Rules (see ‘related links’ below).
Since the launch of the and Schemes, the has published updated versions of the rulebooks and associated implementation guidelines once annually in November of each year. These updated versions normally take effect in the third week of November of the following year. In accordance with industry best practice, all stakeholders and their suppliers therefore have sufficient lead time to address rulebook updates prior to such changes taking effect.
In February 2012, the European Union (EU) legislator, (i.e. the European Parliament and the Council of the EU representing EU Member States), adopted the ‘Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro’ (the Regulation; see ‘related links’ below). This legislative act effectively mandates migration to and in the euro area by 1 February 2014. As communicated in June 2012, the therefore decided to postpone the effective date for the Rulebook version 7.0, Core Rulebook version 7.0 and B2B Rulebook version 5.0 published in November 2012, from 16 November 2013 to 1 February 2014. This allows market participants to adapt their systems and operations to comply with both the Regulation and the updated versions of the rulebooks.
To avoid duplication of costs and efforts within one year and to provide planning security to all stakeholders based on stable rulebook versions in the period following migration to and in the euro area, the decided in December 2012 to postpone publication of the next generation rulebooks ( Rulebook version 8.0, Core Rulebook version 8.0 and B2B Rulebook version 6.0) and associated implementation guidelines to November 2014. These rulebook versions will then take effect in November 2015.
The scheme change management process provides all stakeholders with the opportunity to participate; i.e. to introduce suggestions for changes to the schemes. All interested parties are invited to submit suggestions for changes proposed to be incorporated into the next version of the and Rulebooks using the template provided with the first ‘related link’ below. Suggestions for changes should be directed by email to change-request.EPCemail@example.com by 28 February 2014. Any suggestions for rulebook changes can be sent to the prior to this date and will be taken into consideration for the November 2015 release.
All suggestions for changes to the rulebooks are evaluated by the Payment Schemes Working Group and are consolidated into a single change request per rulebook. As with previous scheme change cycles, all proposed changes to the schemes will be released with the change request documents for a three-month public consultation (this time between May and August 2014; for details on previous consultations, refer to the link ‘ Consultations’ below).
Proposed changes to the schemes that find broad acceptance in the entire stakeholder community are taken forward. Proposed changes that lack such broad support are not – regardless of whether such a change is proposed by a payment service provider or by a user representative. This ensures that the and Schemes evolve in line with the requirements of the majority of all market participants.
Regulation () No 260/2012 (the Regulation) empowers the European Commission to amend the technical requirements applicable to and
The and Schemes have to comply with the technical requirements detailed in Article 5 and in the Annex to Regulation () No 260/2012, also known as the Regulation. Article 13 of the Regulation empowers the European Commission (the Commission) to amend the technical requirements set out in the Annex to the Regulation through delegated acts (see also Article 14). For more information, refer to the Newsletter article, entitled: ‘The New European Decision-Making Landscape: How the European Commission Rules Through ‘Delegated Acts’ (see ‘related articles in previous issues’ below).
The has stressed that any future changes to the Schemes mandated by the Commission should be based on adequate market consultation and reflect broad consensus among all stakeholders. The timelines for such amendments determined by the Commission to take effect should be aligned with the timelines governing the and Rulebook release schedule and the investment cycles of market participants. To date, the Commission has not made publicly available information around whether it plans to amend the technical requirements set out in the Annex to the Regulation, and if so, when this might happen.
It remains the ’s objective to ensure that the and Rulebooks evolve in response to proven market needs, based on a predictable release schedule. The must, however, clarify that moving forward, the may be required to adapt the rulebook release schedule at short notice to ensure compliance with technical requirements set out in the Annex to the Regulation as amended by the Commission.
In October 2013, the published a clarification letter on electronic mandates
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 Core and 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 a clarification letter (Letter EPC098-13; see ‘related files’ below), which addresses the current uncertainty among scheme participants; i.e. payment service providers 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 Core 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 on 23 September 2013 by the Council. Please see the Council statement published on 1 October 2013 included with the ‘related links’ below. The Council, which brings together representatives of both the demand and supply sides of the payments market including the , was established by the Commission and the European Central Bank (ECB) in June 2010. For more information on the Council, refer to the ‘related links’ below.
Council addresses next steps with regard to an Fixed Amount Scheme
In the April 2013 edition of the Newsletter (see ‘ Plenary Meeting Update. Main decisions taken in March 2013’ included with the ‘related articles in previous issues’ below), we reported that the Plenary had resolved to request advice from the Council on the next steps for the implementation of the Fixed Amount (FA) Scheme.
National direct debit instruments without a refund right for authorised transactions exist in a number of countries and are used by consumers for specific services and products. The consumption of such services or products in general happens immediately at the moment of the purchase of the service or product. The specific nature of these goods or services makes a physical return to the supplier of such product or service very difficult or even impossible. Examples are the purchase of digital content on the internet, public transport cards, mobile phone credit or tax payments. No comparable direct debit instrument at level is available for the various customer groups currently using these national direct debit instruments, however. This will reduce the available choice of payment instruments as of February 2014; i.e. following migration to and in the euro area as effectively mandated with EU law. When a consumer wishes to use a direct debit payment method to purchase these types of services or products, the Core Scheme does not provide a certainty of funds for the provider of such services or products as it instead provides an eight-week “no questions asked” refund right for authorised transactions. Given this particular feature of the Core Scheme, the supplier may be less inclined to use the Core Scheme, thereby affecting the availability of convenient payment instruments for customers across .
The service and product providers of those countries that are familiar with a no-refund direct debit instrument for authorised transactions wish to continue using such specific payment instrument beyond February 2014 in order to maintain the viability and continuity of their business without generating risks (and costs). It would further allow them to continue using an efficient, economical instrument which is known, accepted and convenient for their customers. The adoption of Regulation () No 260/2012, also known as the Regulation, and in particular its Article 5 §3 (d) (ii), guarantees an adequate level of consumer protection in case of payment schemes that do not provide the right to a refund. Article 5 §3 (d) (ii) stipulates that for payment schemes that do not provide the right to a refund, the debtor (payer) must have the right to instruct the debtor bank to verify each direct debit transaction, and to check whether the amount and periodicity of the submitted direct debit transaction is equal to the amount and periodicity agreed in the mandate, before debiting the account of the debtor. Article 5 §6 further outlines that where the framework agreement between the debtor and the debtor’s payment service provider does not provide for the right to a refund, the debtor’s payment service provider has to verify each direct debit transaction to check whether the amount and periodicity of the submitted direct debit transaction are equal to the amount and periodicity agreed in the mandate before debiting the debtor’s payment account, based on the mandate-related information. With these explicit legislation specifications, it is considered that robust measures are in place for consumers. As the Regulation clearly defines specific requirements to be followed by payment service providers for payment schemes that do not provide the right to a refund, these stipulations facilitate the introduction of a payment scheme without refund right if there is a wish from stakeholders to have such a scheme.
The Council, chaired by the Commission and the ECB, addressed the development of an FA Scheme at its meeting on 23 September 2013. The Council statement published on 1 October 2013 (see ‘related links’ below) summarises the discussion as follows: “Meeting participants took note of the information provided by the regarding a possible new Direct Debit Fixed Amount scheme and of the related requests that the has received; they also took note of the Dutch practice of no refund direct debits, which are especially important for lotteries. They shared the understanding that the call for a direct debit instrument without the right of refund, provided that some conditions are fulfilled (e.g. the exact payment amount is known in advance), might be justified. However, it was emphasised that a clear understanding is needed as to the goods and/or services this new DD [direct debit] scheme should cater for; it was acknowledged that such an exception to the unconditional consumer right to refund should be limited to a strict number of well identified niche markets. The meeting participants agreed that the relevant stakeholders will jointly prepare a concrete list of goods and/or services, for which the use of a Direct Debit Fixed Amount Scheme as an option in niche markets could be justified. Lotteries are an example of those services. Notwithstanding this constructive way ahead, it was understood that before any new Direct Debit Fixed Amount scheme could be launched consideration should be given also to the minimum adherence requirements set in the Migration End Date Regulation and to the current review of the Payment Services Directive.”
Jean-Yves Jacquelin is the Chair of the Payment Schemes Working Group.
EPC Blog (December 2012): SEPA Credit Transfer and SEPA Direct Debit Rulebooks: Next Scheme Change Management Cycle Takes Place in 2014. Rulebooks to be Published in November 2014 Will Take Effect in November 2015
Related article in this issue:
Conclusions Agreed at Multi-Stakeholder Workshop to Discuss Minimum Requirements for 'BIC from IBAN Derivation' Solutions for Cross-Border SEPA Transactions. European law mandates transition to the 'IBAN only' environment by February 2016
Related articles in previous issues:
EPC Plenary Meeting Update. Main decisions taken in March 2013 ( Newsletter, Issue 18, April 2013)
The New European Decision-Making Landscape: How the European Commission Rules Through ‘Delegated Acts’. SEPA Regulation empowers the European Commission to mandate technical requirements applicable to SEPA payment schemes ( Newsletter, Issue 13, January 2012)
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