One-Leg Out Instant Credit Transfer scheme – enabling faster payments ...

One-Leg Out Instant Credit Transfer scheme – enabling faster payments between SEPA and the rest of the globe

25 May 23

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On 28 March 2023, the European Payment Council ( ) published the first version of its One-Leg Out (OLO) Instant Credit Transfer ( ) scheme rulebook. This new scheme allows payment service providers ( ) to handle the Euro Leg of an international cross-border and/or cross currency (instant) credit transfer, maximising the synergies with existing Single Euro Payments Area ( ) payment ‘rails’. These ‘rails’ include procedures, features and standards, which are reflected in arrangements the are already familiar with (such as the Instant Credit Transfer ( ) scheme and the existing payment infrastructures).

Through the scheme, the in can process incoming and outgoing OLO credit transfers instantly through highly automated and instant funds transfer systems available in the Euro Leg and via similar systems in the respective non-Euro Leg countries or jurisdictions.

The scheme gives the opportunity to offer their customers a faster execution of such international payment transactions, more up-front transparency on costs and parties involved, and better payment status traceability.

What is a One-Leg Out transaction?

It is a transaction whereby only one of the - either the Payer’s or the Payee’s - is located in the SEPA schemes’ geographical scope. The scheme clearly supports such specific payment transactions.

In addition to that, the scheme also supports cross-currency payments between euro and other non-euro currencies (i.e. Nordic currencies, CHF, GBP, Central and Eastern European currencies) within the schemes’ geographical scope.

The genesis of the scheme

It all started in 2018 with a change request—which was not retained for the 2019 Credit Transfer ( ) scheme rulebook—to include incoming euro OLO credit transfers under the scheme rulebook. In the following years, the regularly received questions from scheme participants on whether such transactions are within the scope of the scheme (which they are not).

Meanwhile, continuous enhancements to payment market infrastructures and national payment schemes across the globe have given opportunities for to improve their international payment service offerings in terms of speed, transaction tracking, payment finality and costs.

As for the regulatory side, the European Commission (EC) issued already in 2018 a communication on strengthening the international role of the euro and subsequently, in 2020, its Retail Payments Strategy outlining among others a pillar on efficient international payments. Furthermore, the Financial Stability Board - an international body monitoring and making recommendations about the global financial system - published several targets for enhancing cross-border payments and regularly reports on progress in implementing the G20 Roadmap for Enhancing Cross-Border Payments.

In this context, the Board decided to launch an ad-hoc One-Leg Out Task Force to provide the Board with a report on the business aspects, consequences of and scenarios for allowing euro OLO credit transfers. Based on that report, the Board agreed with the development of an [Instant] Euro One-Leg Out Credit Transfer arrangement.

Eventually, this proposed arrangement has evolved into version 1.0 of the scheme rulebook.

About the rulebook

Following a three-month public consultation on a draft [Instant] Euro One-Leg Out Credit Transfer arrangement which led to various comments from stakeholders of the entire payment value chain, the published the first version of the scheme rulebook on 28 March 2023.

Version 1.0 of the 2023 scheme rulebook focuses exclusively on the Euro Leg of international instant credit transfer-based payment transactions.

Difference between the scheme and the other payment schemes

The scheme is unique as it is defined as a cross-currency payment scheme. Under the and schemes, the currency of the transaction itself is in euro end-to-end although a currency conversion may happen at the Originator and/or at the Beneficiary , and the originator and beneficiary payment accounts may be debited and/or credited in another currency.

Under the scheme, one leg of the international transaction concerned is in euro whereas the other leg is in another currency. This means that the currency conversion may happen at any point in time in the payment chain.

Please note however that under the scheme, the transaction itself can also be in euro end-to-end but only when the sending financial institution or the receiving financial institution of that transaction is based outside .

Participants adhering to the scheme will as a minimum support the scheme as a Euro Leg-Based Payee’s . They can also indicate whether they also support the scheme as a Euro Leg-Based Payer’s , Euro Leg Entry and/or as Euro Leg Exit .

Furthermore, the scheme adherence process defines specific adherence roles which do not exist under the and schemes:

  • established in and/or licensed to operate in a country or territory included in the schemes’ geographical scope, and operating in the Euro Leg, can adhere on an individual basis as a participant.
  • So-called processors can also adhere to the scheme as they may already serve a large community of for which they have designed or will design specific rules for OLO transaction processing. A -wide reach for the scheme through legal commitments with processors can be achieved much faster than on an individual basis.

What's next?

The scheme goes live on Tuesday 28 November 2023 at 08h00 CET.

Up to 31 December 2023, any person or organisation can submit a change request to version 1.0 of the 2023 scheme rulebook in accordance with the Payment Scheme Management Rules.

The received change requests will then be considered during the scheme rulebook change management cycle to be held in 2024. A new scheme rulebook version and associated implementation guidelines will be published in November 2024 and will take effect in November 2025.

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