Transcript Dia 1
De Nederlandsche Bank
Single Euro Payments Area and
the Payment Services Directive
Michael van Doeveren
2nd Conference of the Macedonian
Financial sector on Payments and
Securities settlement Systems
Ohrid
29 June 2009
De Nederlandsche Bank
Eurosysteem
Agenda
What, why and how about SEPA?
SEPA-products
Payment Services Directive
Impact of SEPA
Migration
Closing remarks
De Nederlandsche Bank
Eurosysteem
In 16 countries the Euro........
€
€
Euro area
€
€
€
€
€
€
€
€
€
€
€
€
€
€
De Nederlandsche Bank
Eurosysteem
.....but completely different standards, products and rules for retail
payments…
€
€
€
€
€
€
€
€
€
€
€
€
€
€
De Nederlandsche Bank
€
€
Eurosysteem
and the goal of the European Union is to achieve
an integrated European payments market
€
€
EU
€
€
€
€
€
€
€
€
€
€
€
De Nederlandsche Bank
€
€
Eurosysteem
What is SEPA?
Political vision:
The euro area will be an internal
´domestic´ market for retail payments
generate scale economies and promoting
competition
Concretely:
European payment instruments for both
cross-border and domestic payments in
euro: credit transfers, direct debit and
cards
De Nederlandsche Bank
Eurosysteem
Why SEPA?
European Politics
Improvement
European economy: Lisbon
agenda
Economics
Internal
market: volume and competition
Banks
To
prevent ‘further regulation’ after Regulation
2560/2001
Especially Cross-border banks can profit from
new market circumstances
De Nederlandsche Bank
Eurosysteem
How to realise SEPA?
Self-regulation: European Payment Council
of banks develops standards and products
Payment Services Directive: legal
harmonisation
De Nederlandsche Bank
Eurosysteem
EPC Technical harmonisation
Two kinds of agreements in EPC:
1. About interbank processing:
Credit transfer rulebook
Direct debit rulebook
2. Restructuring of the market:
SEPA Cards-framework (SCF)
Clearing & Settlement Framework
Single Euro Cash Area
De Nederlandsche Bank
Eurosysteem
Payment chain
debit
credit
payment
instruction
payment
information
bank
bank
clearing
debit
payment
information
credit
payment
instruction
seller
buyer
good/service
De Nederlandsche Bank
Eurosysteem
BIC
• BIC: Bank Identifier Code
• Issuing agent (on behalf of ISO): SWIFT
I
N
G
Bank code
B
N
L
Country
code (ISO)
2
A
Location
code
BIC8
X
X
X
Branch code
BIC11
BIC: standardised construction
De Nederlandsche Bank
Eurosysteem
IBAN
• IBAN : International Bank Account Number
• Administrator of Register of national IBANs (on behalf of ISO): SWIFT
Country
code
(ISO)
Check
digit
Bank identifier
Domestic account
Number
• Remarks:
-
The Bank Identifier in an IBAN is country specific
-
The length of the bank identifier varies from country to country
-
Each country has its own Basic Bank Account Number system
• Summary:
-
Country code and check-digits
: uniform
-
Bankidentifier and BBAN
: country specific
De Nederlandsche Bank
Eurosysteem
IBAN examples
IBAN Examples
Finland
FI21 1234
France
FR14 2004
Germany
DE89 3704
Ireland
IE29 AIBK
Luxembourg
LU28 0019
Netherlands
NL91 ABNA
Norway
NO93 8601
Poland
PL61 1090
United Kingdom
GB29 NWBK
(composition: country code check
5600
1010
0044
9311
4006
0417
1117
1014
6016
0007
0505
0532
5212
4475
1643
947
0000
1331
85
0001 3M02 606
0130 00
3456 78
0000
00
lengte 27
lengte 18
0712 1981 2874 lengte 28
9268 19
digits Bankidentifier branchindentifier BBAN)
Source: www.swift.com 20080811 IBAN Registry
• Remarks:
• IBAN and BIC contain both bank identifiers, but they could differ
•
IBAN and BIC contains both a country code, but they could differ
De Nederlandsche Bank
Eurosysteem
SEPA Credit Transfer
(in use since 28 January 2008)
SEPA Credit Transfer: Standard for bank to
bank credit transfers in euro (mass payments)
Payments are made for the full original amount
IBAN and BIC are obliged
ISO 20022 UNIFI standards (XML-language)
140 characters of remittance information are
delivered to the beneficiary
Unstructured or restructured remittance
information as agreed between partners
De Nederlandsche Bank
Eurosysteem
SEPA Direct Debit
(coming from 1 November 2009 on)
SEPA Direct Debit: Standard for bank to bank
Direct Debits in euro
Payments are made for the full original amount
IBAN and BIC are obliged
ISO 20022 UNIFI standards (XML-language)
One-off or recurrent
A mandate is signed by the debtor (e-mandate)
Pre-notification (mostly 14 calender days in
advance)
Refunds (PSD: 8 weeks) and returns
De Nederlandsche Bank
Eurosysteem
Competition on cards in SEPA
De Nederlandsche Bank
Eurosysteem
Point-of-sale card payment system
De Nederlandsche Bank
Eurosysteem
SEPA Cards Framework
Policy scope (1)
Seperation of scheme governance from
underlying processing
Open non-discriminatory scheme
membership
Single, pan-European license
Open and transparant pricing policies
EMV-implementation: Chip and PIN
implementation shift for all cards by end 2010
De Nederlandsche Bank
Eurosysteem
SEPA Cards Framework
Policy scope (2)
A common approach to fraud and reporting
Standardised processes and procedures for
card acceptance and certification
Convergence of scheme rules for common
non-competitive aspects
References the Payment Services Directive
Common, consistent experience for all
cardholders at POS and ATM
Merchant choice of card type accepted
Interoperability and all merchant SEPA card
acceptance
De Nederlandsche Bank
Eurosysteem
SEPA for cards
Vision of the Eurosystem (1)
The Consumer can choose between different
debit card brands
The Merchant can choose which debit cards
brands he or she accept
The cards market is competitive, reliable and
efficient, as well as for card holders,
merchants as for processing
More aspiration is needed in the SEPA for
cards: need for an additional European debit
card scheme
Further card standardisation is vital
De Nederlandsche Bank
Eurosysteem
SEPA for cards
Vision of the Eurosystem (2)
All technical and legal barriers are eliminated
Interchange fees should not be misused to
generate excess revenues for the banking
system, at the costs of merchants and
cardholders
Preference for no MIF-model: see for
example the MasterCard and VISA cases
Ideal situation: ‘Any card at any terminal’
De Nederlandsche Bank
Eurosysteem
Need for
Standardisation!
De Nederlandsche Bank
Eurosysteem
Standardisation SEPA for Cards
Card to terminal (EMV)
Terminal-to-acquirer (EPAS, ERIDANE)
Acquirer-to-issuer (ISO 8583 and ISO 20022)
Certification of cards and payment terminals
De Nederlandsche Bank
Eurosysteem
Options for SEPA Compliancy
•
•
•
Select one (or more) of the international
schemes to replace the current national
schemes
Make national schemes SCF-compliant
Co-branding of national systems with
international systems
De Nederlandsche Bank
Eurosysteem
Initiatives for additional
European Card schemes
PayFair:merchant initiative
EAPS: cooperation of national schemes
Monnet: French and German banks
Transforming a three party payment scheme?
Other?
De Nederlandsche Bank
Eurosysteem
Impact of SEPA for cards
Consumers
Use
of cards in the whole SEPA area: any card at
any terminal
Retailers
More
choise: terminal, acceptance of brands,
acquiring
Banks and payment schemes
Change
of markets, new products, new systems
De Nederlandsche Bank
Eurosysteem
Milestones
Credit transfer and Direct debit
European Rulebooks are the basis for products of
the banks
Framework for clearing and settlement
Credit transfers from 28 January 2008 on
Direct debit from end 2009 on
Cards
SEPA Cards Framework
After 2010 only SEPA-cards
De Nederlandsche Bank
Eurosysteem
Role public sector
SEPA is a project banks: self-regulation via EPC
However…
European Commission
Payment Services Directives
Public users are the early adopters
Eurosystem: catalyst role
6th Progress report November 2008
De Nederlandsche Bank
Eurosysteem
Legal harmonization: Payment
Services Directive
Content:
Proportional supervisory regime for nonbank payment service providers
Transparency requirements
Rules about the relationship of the
payment service provider and user
De Nederlandsche Bank
Eurosysteem
Payment Institution
What is a payment institution?
Non bank provider of payment services, and:
End users
Transferable balances: no cash
Owns customer funds temporarily
Pure intermediary
Payments are a main activity
De Nederlandsche Bank
Eurosysteem
Payment institutions
Proportional prudential supervision
License
Capital requirements
Internal processes
De Nederlandsche Bank
Eurosysteem
Rights and obligations
Information requirements - single payment transactions
Information to the payer
prior
after receipt
Information needed
Execution time
Charges
Reference exchange
rate
Transaction Identifier, payee
Amount of the payment
Charges payable
exchange rate used
Date of receipt order
Information to the payee
Reference, payer
Amount
Charges
Exchange rate
Credit value date
De Nederlandsche Bank
Eurosysteem
Rights and obligations
Information requirements - Payments via framework contract
prior
after receipt
Payment service provider
Supervisor
Product features
Charges
Safeguard requirements
Transaction identifier, payee
Amount
Charges
Exchange rate used
Debit value date
Information for payee
Transaction identifier, payer
Amount
Charges
Exchange rate used
Credit value date
De Nederlandsche Bank
Eurosysteem
Rights and obligations
Other obligations for the provider
d+1
No sending of unsolicited payment
instruments
User provides incorrect unique identifier:
reasonable efforts to recover funds
And more..
De Nederlandsche Bank
Eurosysteem
Rights and obligations
Obligations for the user
Act according to the contract
Reasonable safety measures
Direct notification of loss/theft
And more..
De Nederlandsche Bank
Eurosysteem
PSD wrap up
PSD provides harmonisation of:
Market access: besides credit institutions and
electronic money institutions also payment
institutions
Rights and obligations
Implementation in national legislation
ultimately 1november 2009
De Nederlandsche Bank
Eurosysteem
Potential for SEPA compliancy NL
Non SEPA Compliant
instruments
9%
SEPA Credit Transfers
29%
SEPA Cards
36%
SEPA Direct Debits
26%
De Nederlandsche Bank
Eurosysteem
Impact of SEPA
Consumers
Use
IBAN and BIC
Use of cards in the whole SEPA area
Firms (private and public)
Easier
cash-management and administration
Standard formats (ISO 20022 XML)
Use of IBAN and BIC
Centralisation of accounts and direct debits
Retailers
More
choise: terminal, acceptance of brands, acquiring
Banks
Change
of markets, new products, new systems
De Nederlandsche Bank
Eurosysteem
Benefits of SEPA
Efficiency, level playing field and transparency
lead to cost benefits for society in the long run
Reduction costs for average user of payment
services in Europe
Comfort/User-friendliness
Innovation
De Nederlandsche Bank
Eurosysteem
Migration
Aim: a smooth migration to SEPA
To organise nationally
Market driven
Speed can differ between countries
Stakeholder involvement and communication are
important tools for success
Need for an end date
De Nederlandsche Bank
Eurosysteem
Migration Plan of the
Netherlands
Objective: an orderly and efficiently change over
from domestic payments to SEPA
Scope: all existing payment instruments for which
there is a SEPA-alternative
Consequences and choices for different
stakeholders
Market driven migration
Identifying barriers, changes and solutions
Mid 2009 evaluation: an end date can foster
migration
De Nederlandsche Bank
Eurosysteem
Points of concern SEPA
National Forum on the Payment System
Price developments
Range of options open to consumers and
retailers, caterers and other regarding debit card
brands
User-friendliness of migration to IBAN and BIC
Safety of SEPA direct debit
Prolongation of direct debit contracts and
mandates
Standardisation in the Bank-client domain
Interbank Swich support service
Dispute handling
Accessibility of the noncash payment systemDe Nederlandsche Bank
Consultation process
Eurosysteem
Closing remarks
The first phase of SEPA (SCT) was introduced
succesfully on 28 January 2008
SEPA will transform the European landscape
SEPA is good and has benefits for all users!
Legal harmonisation is essential
Implementation and transition will be planned
carefully
End date can stimulate the migration
SEPA will raise further dynamics: e-invoicing, eand m-payments etcetera
De Nederlandsche Bank
Eurosysteem