Post on 05-Feb-2016
description
De Nederlandsche Bank Eurosysteem
SEPA and the Payments Services Directive Michael van Doeveren
3rd Conference of the Macedonian Financial sector on Payments and Securities settlement Systems Ohrid 28 June 2010
De Nederlandsche Bank
De Nederlandsche Bank Eurosysteem
Agenda
SEPA-basics SEPA-products Payment Services Directive Migration Closing remarks
De Nederlandsche Bank Eurosysteem
The euro is the common currency of 16 countries today, but retail paymentsare still organised nationally
€
€
€
€
€
€
€
€
€
€ €
€ €
€
€ €
De Nederlandsche Bank Eurosysteem
SEPA means an uniform payments market
EU
€
€
€
€
€
€
€
€
€
€ €
€
€
€
€
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
End of 2008 (numbers)
NL EU 16 EU 27
Inhabitants 16.5 mln 322 mln 499 mln
Firms 240.000 17 mln 25 mln
Banks 70 7,000 9,000
Payment accounts 25 mln 306 mln 450 mln
Transactions 4.8 bln 54.8 bln 78.1 bln
POS terminals 316,000 6.2 mln 8.1 mln
ATM’s 8,650 315,000 426,000
Cards 31 mln 473 mln 727 mln
European Payment Market
Bron: ECB, Eurostat
EU
De Nederlandsche Bank Eurosysteem
Payment Trends in the EU
Source ECB
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
2000 2001 2002 2003 2004 2005 2006 2007 2008
debit and credit cards
credit transfers
direct debits
cheques
E-money cards
• Number of transactions per type of payment instrument (billions)
De Nederlandsche Bank Eurosysteem
SEPA Migration is like a Cascade
Banks, Payment Institutions, Card schemes and processors:
offer: SEPA products New infrastructure
Governments, firms and merchants:Realise migration
Consumers: Adoption of new products like cards
SEPA is of all of us!
De Nederlandsche Bank Eurosysteem
BIC
• BIC: Bank Identifier Code• Issuing agent (on behalf of ISO): SWIFT
Bank code Countrycode (ISO)
Locationcode
Branch code
BIC: standardised construction
BIC8BIC11
I N XG B N L 2 A X X
De Nederlandsche Bank Eurosysteem
IBAN
• IBAN : International Bank Account Number• Administrator of Register of national IBANs (on behalf of ISO): SWIFT
Countrycode (ISO)
Bank identifierCheck digit
Domestic accountNumber
• 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 5600 0007 85France FR14 2004 1010 0505 0001 3M02 606 length
27Germany DE89 3704 0044 0532 0130 00Ireland IE29 AIBK 9311 5212 3456 78Luxembourg LU28 0019 4006 4475 0000Netherlands NL91 ABNA 0417 1643 00 length
18Norway NO93 8601 1117 947Poland PL61 1090 1014 0000 0712 1981 2874 length
28United Kingdom GB29 NWBK 6016 1331 9268 19(composition: country code check 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 amountIBAN and BIC are obligedISO 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(introduced on 2 November 2009)
SEPA Direct Debit: Standard for bank to bank Direct Debits in euro (B2C and B2B)
Payments are made for the full original amountIBAN and BIC are obligedISO 20022 UNIFI standards (XML-language)One-off or recurrentA 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
Impact of SEPA for Cards
ConsumersUse of cards in the whole SEPA area: any card at any terminal
RetailersMore choise: terminal, acceptance of brands, acquiring
Banks and payment schemesChange of markets, new products, new systems
De Nederlandsche Bank Eurosysteem
Legal harmonization: Payment Services Directive
Content: Proportional supervisory regime for non-bank payment service providers
Transparency requirementsRules about the relationship of the payment service provider and user
De Nederlandsche Bank Eurosysteem
Scope: payment services
1. Services enabling cash to be placed on a payment account 2. Services enabling cash withdrawals from a payment account 3. Execution of payment transactions; direct debits, payment transactions through a payment card, credit transfers4. Execution of payment transactions where the funds are covered by a credit line for a payment service user:5. Issuing and/or acquiring of payment instruments.6. Money remittance.7. Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services.
De Nederlandsche Bank Eurosysteem
Payment Institution
What is a payment institution?Non bank provider of payment services, and:End usersTransferable balances: no cashOwns customer funds temporarilyPure intermediaryPayments are a main activity
De Nederlandsche Bank Eurosysteem
Payment institutions
Proportional prudential supervisionLicense Capital requirementsInternal processes
De Nederlandsche Bank Eurosysteem
Rights and obligations
Information requirements - single payment transactions
Information to the payer
prior after receipt
Information needed Execution time
ChargesReference exchange
rate
Transaction Identifier, payeeAmount of the payment
Charges payableexchange rate usedDate of receipt order
Reference, payerAmountCharges
Exchange rateCredit value date
Information to the payee
De Nederlandsche Bank Eurosysteem
Rights and obligations
Information requirements - Payments via framework contract
prior after receipt
Information for payee
Payment service providerSupervisor
Product featuresCharges
Safeguard requirements
Transaction identifier, payeeAmount Charges
Exchange rate usedDebit value date
Transaction identifier, payerAmountCharges
Exchange rate usedCredit value date
De Nederlandsche Bank Eurosysteem
Rights and obligations
Other obligations for the providerd + 1No sending of unsolicited payment
instrumentsUser provides incorrect unique identifier:
reasonable efforts to recover fundsAnd more..
De Nederlandsche Bank Eurosysteem
Rights and obligations
Obligations for the userAct according to the contractReasonable safety measuresDirect notification of loss/theftAnd more..
De Nederlandsche Bank Eurosysteem
PSD summing up
PSD provides harmonisation of: Market access: besides credit institutions and
electronic money institutions also payment institutions
Rights and obligationsImplementation in national legislation
1november 2009: done by most countries
De Nederlandsche Bank Eurosysteem
European law: other items
Regulation 924/2009 (renewal of regulation
2560/2001)No price difference between domestic and
cross border direct debits
Adaptation of the electronic money directiveGreater consistency with the PSDNew prudential regime
De Nederlandsche Bank Eurosysteem
Need for Standardisation!
De Nederlandsche Bank Eurosysteem
Standardisation SEPA for Cards
Four card domains of action:
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
What is EMV?
• Worldwide standard for • Chip on cards• (readers) ATM & EFT POS
terminals • Debit and credit cards
• Much safer than magstripe
• EMV: Europay, MasterCard, VISA
insert
De Nederlandsche Bank Eurosysteem
Status Migration: EMV Cards
0
10
20
30
40
50
60
70
80
90
100
AT BE FR LU IE FI SI DE CY NL PT IT SK GR MT ES
Status 1 January 2010 (Source: EPC)
De Nederlandsche Bank Eurosysteem
Status Migration: EMV ATM’s
Status 1 January 2010 (Source: EPC)
0
10
20
30
40
50
60
70
80
90
100
FI FR IE NL PT SK LU AT ES GR DE SI BE IT CY MT
De Nederlandsche Bank Eurosysteem
Status Migration: EMV POS Terminals
Status 1 January 2010 (Source: EPC)
0
10
20
30
40
50
60
70
80
90
100
LU FR IE MT BE SK PT ES IT SI CY GR AT FI NL DE
De Nederlandsche Bank Eurosysteem
SEPA Awareness Dutch end-users
SEPA awareness SMEs fairly low
SEPA awareness public sector and large companies very high
Public sector and large companies well informed about SEPA consequences
Do you know what is meant by the integration of the European retail
payments market ?
0%20%40%60%80%
100%
SMEs (n=458) Large organisations(n=7)
Public sector (n=10)
yes no
Do you know the consequences for your own organisation of the introduction of European
payment instruments?
0%
20%
40%
60%
80%
100%
SMEs (n=458) Large organisations(n=7)
Public sector (n=10)
No insight Insufficient insight General picture Complete insight
De Nederlandsche Bank Eurosysteem
Transition stage Dutch end-users
90% of SMEs have not made any SCT & SDD preparations yet
± 20% of large companies and public sector can accept and make SCTs
± 60% of large companies and public sector is busy with SDD preparations
Transitional stage end-users SEPA direct debit (SDD)
0%
20%
40%
60%
80%
100%
SMEs(n=229)
Largeorganisations
(n=7)
Public sector(n=10)
Hardly done anythingyet
Busy with preparations
I can accept and makepayments wit SDD
Transition stage end-users SEPA credit transfer (SCT)
0%
20%
40%
60%
80%
100%
SMEs (n=440) Largeorganisations
(n=7)
Public sector(n=10)
Hardly done anythingyet
Busy with preparations
I can accept and makepayments wit SCT
De Nederlandsche Bank Eurosysteem
Concluding Remarks
The success of SEPA depends on: SEPA for Cards means ‘Any card at any
terminal’. This requires time. Further European standardisation, which
is not easy An end date for national payment
instruments Interchange fees and payment fees Well organised stakeholder involvement
and consultation Innovation at a European level (e-SEPA,
contactless payments, mobile payments)
De Nederlandsche Bank Eurosysteem
Questions?