SEPA Session info ERP Banque nationale de Belgique - 15/04/2013.

SEPA Session info ERPBanque nationale de Belgique - 15/04/2013

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PSD & SEPA

Payment Services Directive (PSD)► Legal framework for payments in the EEA► Introduced by the EC – transposed into national law► Purpose:● raise the level of protection for consumers (right to a refund)

● guarantee better execution times for payments

● increase transparency of fees and commission

● provide a legal framework for SEPA

► Scope:● new SEPA products

● existing payment schemes, such as DOM80

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PSD & SEPA

Single European Payments Area (SEPA)► Initiative of the European Commission,

supported by the ECB and the EPC.► Applies to the countries of the EEA +

Switzerland + Monaco (the SEPA zone)► Standardisation of payments in EUR ● SEPA Credit Transfer

● SEPA Direct Debit

● SEPA Cards

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SEPA - End date regulation

2009 2010 2011 2013

Start SCT

"End Date Regulation” voted by European Parliament & endorsed by EC

(Feb 2012)

Start SDD

SDD

SCT

2014

End Date for domestic tools

(Feb 2014)

In 1 year

Local systems

… …2008 2012

Today

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SEPA - End date regulation

Schemes

Formats

Consumer protection

• End of domestic CT and DD schemes in euro countries as from 01/02/2014

• Mandatory use of ISO XML 20022 format to banks as from 01/02/2014

• IBAN mandatory as from 01/02/2014

• BIC no longer required for domestic transactions as from 01/02/2014

• BIC no longer required for cross-border transactions as from 01/02/2016

• New protection measures for direct debits consumers

(white/black list, limit amount, etc.) as from 01/02/2014

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SEPA - XML

► http://www.febelfin.be/nl/betaalverkeer/richtlijnen-en-protocollen

XML Tag Occurrence Nom

FinancialInstitutionIdentification

<FinInstnId> [1..1] TAG

BIC {Or <BIC> [0..1] BIC-format

Other Or} <Othr> [0..1] TAG Identification <Id> [1..1] Max35Text

Ou le BIC, ou Other > Identification doivent être utilisés. Le Bank Identifier Code (BIC) se compose de 8 ou 11 caractères, dont seuls les 8 premiers sont significatifs. Seule la valeur “NOTPROVIDED” est permise pour Other > Identification.

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SEPA - IBAN

► http://www.swift.com/solutions/messaging/information_products/directory_products/iban_format_registry/index.page

SEPA Credit Transfer

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Graphic 1: Transfers in SEPA format (2008 - February 2012)

(% of the total number of bank transfers)

Sources: European Central Bank (ECB) and the Centre for Exchange and Clearing (CEC).

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SCT Migration Project

1. January 2008 : SCT Start – up

2. October 2011 : End of Legacy Paper Acceptance (BE)

3. 2011 – 2012 : Communication campaign Febelfin / NBB

4. End Date : 01/02/2014 no domestic payments types can be used

10

37%to go

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SCT Migration Client Impact

► Clients must use the IBAN

► Clients must provide the BIC● Domestic payments: until 01/02/2014● Cross-border payments: until 01/02/2016

► Clients must use the ISO20022 payment standards, when initiating payments by file upload

● Important change with regards to Domestic Credit Transfer: Beneficiary name is a mandatory field for all SCT payments

► Reporting:● Clients should upgrade to CODA v2.3● Clients may request XML reporting as of 01/02/2014

SEPA Direct Debit

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Migration to SDD in Belgium(July 2011 - July 2012)

Sources: European Central Bank (ECB) and the Centre for Exchange and Clearing (CEC).

(% of the total number of transactions)

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SDD transactions in Europe

Source: ECB

(% of the total number of transactions)

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Breakdown of the total direct debit mandates on the total number of creditors registered in Belgium

(in percentage)

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% M

anda

tes

Number of companies

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Mandate management - SDD vs DOM80

2) Prenotification (bill)

New!!

Debtor

Creditor bankDebtor bank

5) Debit

1) Mandate

6)

4)

3) XML collection file + MRI

Creditor

4) collection

6)

Clearing & settlement mechanism

New!!

Debtor

Creditor bankDebtor bankMandate management

CreditorMandate management

6) Credit

1) Mandate

Informs

Debtor bank

1b) mandateconfirmation

B2B!!

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Mandate management - Migration from DOM80 to SDD

► Possible to keep existing mandates on transition from DOM80 to SDD Core

► Existing mandates are kept at the debtor’s bank► Once the mandate has been migrated, it is

impossible to return to DOM80► A creditor can use DOM80 and SDD Core alongside

each other (but not for the same mandate)

► New mandates are required on transition to SDD B2B

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Mandate management - Migration from DOM80 to SDD

► DOM80 data are uploaded by the debtor banks according to a predefined calendar

► Those data are enlarged with IBAN and BIC► Creditor banks can download DOM80 data as

often as they wish► Once a creditor begins with its migration

code M/S: avoid creation of new DOM80 by debtor banks

► Once a creditor finished its migration form to NBB: removed from the file

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End date regulation

End date = 01/02/2014

Belgian banks did not ask a waiver on the Member State options

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Member State Options

Article 16.6 Postponement of the Leading IBAN principle for national Transfers and Direct Debits to 01/02/2016

Article 6.4

End dates for national Credit transfers & Direct Debits 01/02/2014

Member states are allowed to opt for an earlier adoption than the stated end dates

Article 16.1

Conversion services for national payment transactions

BBAN -> IBAN for consumers - Germany, Spain

Non-consumers must provide the correct IBAN to the PSP

Article 16.5

Format conversion services local format -> XML

(batches converted internally by the PSP into XML) - Spain, Italy

Articles 16.3/16.4

Niche products market share less then 10 % postponed to 01/02/2016

ELV Direct debits: in the frame of direct debits linked to the use od debit cards 01/02/2016 - Germany, Spain, France

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3 LEVELS Group Header « Group header » (FILE)

Payment Information 1

Payment Information 2

Payment Information 3

« Payment Information »(BATCH)Transaction Information 1

Transaction Information 2

Transaction Information 3

Transaction Information 4

Transaction Information 5

Transaction Information 6

« Transaction Information »(PAYMENT)

XML structure

File structure

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XML structure

XML and only XML

For each DD batchSame Due DateSame Sequence Type:

First (D-5)Recurrent (D-2)Final (D-2)One-off (D-5)

Same Scheme

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Test your files !

► Tools are available at banks side to test your XML files► Your files can be analysed► Errors are explained► Validation is proposed

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Lifecycle of the sequence types

1.

SDD Sequence type sent by the Creditor

Type of R-trx

Before Due Date: Pacs.002 Reject or Request for Cancellation (RFC)

Camt.056

After Due Date: Pacs.004 Return/Refund

Next collection with same mandate based on R-transaction received

First Reject/RFC First

First Return/Refund Recurrent

Recurrent Reject/RFC/Return/Refund Recurrent

Last Reject/RFC Last

Last Return/Refund Mandate expired.

One OFF Reject/RFC One OFF

One OFF Return/Refund Mandate expired

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Reporting

► The management of the files/batches and transactions has an impact on the reporting

► Booking at batch level► If customer has a “global” parameter, he can also ask

for details of the batch (request is made to the banks)

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Disputed authorised transactionMD06

Mandate data missing or incorrectMD02

No valid mandateMD01

Transaction code incorrect, invalid file formatFF01

Identifier of the creditor incorrectBE04

Duplication collectionAM05

Transaction code incorrect, invalid file formatAG02

DD forbidden on this account for regulatoryreasons

AG01

Account identifier (IBAN incorrect)

Account closed

AC01

AC04

Disputed authorised transactionMD06

Mandate data missing or incorrectMD02

No valid mandateMD01

Transaction code incorrect, invalid file formatFF01

Identifier of the creditor incorrectBE04

Duplication collectionAM05

Transaction code incorrect, invalid file formatAG02

DD forbidden on this account for regulatoryreasons

AG01

Account identifier (IBAN incorrect)

Account closed

AC01

AC04

“R’s” transactions

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“R’s” transactions

Specific service offered by the debtor bankSL01

Regulatory reasonRR03

Regulatory reasonRR02

Regulatory reasonRR01

Bank identifier (BIC) incorrectRC01

Reason not specifiedMS03

Refusal by the debtorMS02

Debtor deceasedMD07

Specific service offered by the debtor bankSL01

Regulatory reasonRR03

Regulatory reasonRR02

Regulatory reasonRR01

Bank identifier (BIC) incorrectRC01

Reason not specifiedMS03

Refusal by the debtorMS02

Debtor deceasedMD07

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The Pre-Notification

The creditor can send the pre-notification

separately or can consider the invoice as a pre-notification.

The creditor & the debtor can agree about another timing for the pre-notification.

Paper, e-mail, sms…

The provider sends to the debtor a preadvice at least 14 days

before the due date.

Pre-notificationMandate reference : 123456789Name of the supplier : Subscription Magazine ABCAmount : 57,23 eurosPayment date : every year 15th of JanuaryFirst payment : 15th of January 2009

Pre-notificationMandate reference : 123456789Name of the supplier : Subscription Magazine ABCAmount : 57,23 eurosPayment date : every year 15th of JanuaryFirst payment : 15th of January 2009

Pre-notification mandatory if amount and/or debit date changes

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The mandate reference must be allocated by the creditor and is limited to 35 positions. It is advisable to keep the reference short and simple. This will make it easier for debtors to confirm mandates.

The mandate

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DOM 80 >< SEPA Direct debits

In the DOM 80 system, you could as creditor collect the money (credit of your account) but also reimburse your customers for any amount (debit of your account).

In the SEPA Direct Debit system, reimbursements are possible via “Reversal” if same amount as for debit and same transaction reference.Otherwise, a Credit transfer will be needed.

SEPA DD: Reimbursements are not possible

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Non-target days

New Year's Day

Good Friday

Easter Monday

1 May (Labour Day),

Christmas Day and 26 December

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DOM 80 number and SEPA unique reference

► Dom 80 number can be:

Unique 3/7/2 positions: most of the banks

3/7/2 is the account number of the debtor: ING, Bank Van Breda, others ?

SEPA unique reference provided by the creditor needs to be different of the account number

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DOM 80 number & SEPA unique reference

► 1 contract = 1 mandate reference following the SEPA Rulebooks

► 1 DOM 80 number = 1 unique mandate reference► Quid if different contracts with the same DOM 80

number ? ► National Bank file has foreseen 6 positions beside the

3/7/2

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DOM 80 number & SEPA unique reference

► Example

If 1 DOM 80 number covers different contracts, the 6 positions next to the 3/7/2 can be used

3/7/2 …..1 -> 1 SEPA reference for the contract 1

3/7/2 …..2 -> 1 SEPA reference for the contract 2

3/7/2 …..3 …

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Latest status SEPA

1. 1. E-mandates

2. Survey in Q4, 2012 at National level► Task force at EPC level► Task force at Febelfin level

► 2. Fixed amount scheme ( or non refund SDD scheme )

► Code of conduct ? Scope ?► 3. Core 1► Austria, Germany, Spain

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Conclusion

► Go for it ! Less than 200 days left► There is no option, mandatory by law, the creditors

need to be migrated for the 1st Feb, 2014► A lot of opportunities for your customers► Banks and the National Bank are ready to support you

in providing more information► Please, put the SEPA module in a current version of

the software

Communication

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Communication: Regulation,considérant 15

► "Il est indispensable que tous les acteurs, notamment les citoyens de l'Union, soient informés de façon appropriée et dans un délai raisonnable, de manière à être pleinement préparés aux changements que le SEPA apportera. Par conséquent, les principales parties prenantes, telles que les prestataires de services de paiement, les administrations publiques et les banques centrales nationales, ainsi que les personnes effectuant régulièrement des paiements devraient mener de larges campagnes d'information spécialisées, proportionnelles aux besoins et adaptées à leur public si nécessaire, afin de sensibiliser le public et de préparer les citoyens à la migration vers le SEPA. Il y a lieu notamment de familiariser les citoyens à la migration du code BBAN au code IBAN. Les comités de coordination nationaux sont les mieux placés pour coordonner ces campagnes d'information."

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Communication plan NBB (March 2012 – February 2014)

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Communication - Support NBB

► Toolkit● One pager

● Videos

● PPT Presentations

● Links: ECB, EPC, Febelfin,...

► Other● Presentations

● Documentation

● Op demand...

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Communicatie - Support NBB

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Useful SEPA links

► SEPA Belgium (www.sepabelgium.be)

► Febelfin (www.febelfin.be) http://www.febelfin.be/fr/paiements

► NBB (www.nbb.be/sepa)Payment systems - SEPA

► European Payments Council (EPC)(www.europeanpaymentscouncil.eu)

► ISO 20022 standard (www.iso20022.org)