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SEPA Session info Big Billers

SEPA Session info Big Billers. Banque nationale de Belgique - 18/01/2013. 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)

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SEPA Session info Big Billers

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  1. SEPA Session info Big Billers Banque nationale de Belgique - 18/01/2013

  2. 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

  3. 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

  4. SEPA - End date regulation Today In 1 year End Date for domestic tools (Feb 2014) "End Date Regulation” voted by European Parliament & endorsed by EC (Feb 2012) 2008 … 2009 2010 2011 2012 2013 2014 … Local systems SCT SDD Start SCT Start SDD

  5. SEPA - End date regulation Schemes • End of domestic CT and DD schemes in euro countries as from 01/02/2014 Formats • 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 Consumer protection • New protection measures for direct debits consumers • (white/black list, limit amount, etc.) as from 01/02/2014

  6. SEPA Credit Transfer

  7. Graphic 1: Transfers in SEPA format (2008 - November2012) (% of the total number of bank transfers) 65% 59,80% 61,25% 60% 58,03% CEC 52,30% 55% 47,66% Euro area CSMs 50% 45,09% 44,71% 45% 38,83% 40% 33,33% 35% 30,30% 29,57% 30,18% 27,16% 30% 23,71% 25% 21,07% 20,50% 20% 16,86% 16,07% 13,90% 15% 10% 6,20% 1,91% 5% 0% 1,80% Sources: European Central Bank (ECB) and the Centre for Exchange and Clearing (CEC).

  8. SCT Migration Project January 2008 : SCT Start – up October 2011 : End of Legacy Paper Acceptance (BE) 2011 – 2012 : Communication campaign Febelfin / NBB End Date : 01/02/2014 no domestic payments types can be used 40%to go 8

  9. 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 If you are using an ERP package or accounting package, your systems would probably be impacted. Please contact your software provider for more information

  10. SEPA Direct Debit

  11. Migration to SDD in Belgium(July 2011 - July 2012) 98,17% 97,56% 97,69% 96,70% 97,34% 100 87,08% 87,56% 90 85,79% 86,55% 83,65% 84,71% 84,04% 80,52% 80 70 60 50 % Volumes 40 30 18,98% 20 15,32% 15,66% 12,86% 14,72% 13,61% 12,43% 11,89% 10 2,65% 1,38% 2,10% 1,93% 1,74% 0,55% 0,59% 0,69% 0,65% 0,60% 0,58% 0,51% 0,49% 0 0,56% 0,51% 0,65% 0,45% 0,56% jul/11 aug/11 sep/11 oct/11 nov/11 dec/11 jan/12 feb/12 mar/12 apr/12 may/12 jun/12 jul/12 % SDD CORE % SDD B2B % legacy direct debit (DOM80)

  12. SDD transactions in Europe 14 2,50 12 2,00 10 1,50 8 % share of SDDs Transactions (millions) 6 1,00 4 0,50 2 0 0,00 Volume ShareSDD Source: ECB

  13. Breakdown of the total direct debit mandates on the total number of creditors registered in Belgium 100% 100% 90% 80% 70% 60% 50% % Mandates 40% 30% 20% 10% 0% Numberof companies (in percentage)

  14. (Provisional) plans for migration towards the SDD by some of the big billers 2009 2010 2013 2011 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 April November 01/02 2014 End dateRegulation Start SDD

  15. Mandate management - SDD vs DOM80 New!! Creditor Mandate management Debtor Debtor Creditor 1) Mandate 2) Prenotification (bill) B2B!! 6) New!! Informs 5) Debit 1) Mandate 4) Clearing & settlement mechanism 4) collection 1b) mandateconfirmation 3) XML collection file + MRI Debtor bank Debtor bankMandate management Debtor bank Creditor bank Creditor bank 6) Credit 6)

  16. 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

  17. Mandate management - The mandate 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.

  18. Mandate management - Creditor ID • New SDD creditor: • Creditor receives Creditor ID from the bank (in the form of a certificate): • Positions 3 and 4: Check digit (does not apply on ‘Business Code’) • Positions 8 to 35 (max.): Country-specific ID • either identical to the creditor's Belgian business number (10 positions) • or ‘bank code’ + ‘D’ + a bank counter (max. 24 positions)

  19. Mandate management - Changes SDD rulebook says for changes in: • Unique Mandate Reference • creditor identification • creditor name • debtor’s account number • to another number within the same bank • to another number with another bank The creditor must report the amendments to the Creditor bank as part of the next collection (as a “mandate amendment”). Additional attention point: in case 4.B, the creditor must send the next collection as a “FIRST”. • The paper mandate must be updated as well. Necessary to counter refund requests! • B2B? a new confirmation is needed for all amendments except n°3 (Febelfin Consensus) • Creditor to evaluate if new mandate might not be more opportune instead of working with a mandate amendment

  20. SDD in detail - Prenotification The creditor needs to notify the debtor of an upcoming collection • Initiative of the European Payments Council, supported by the EC and the ECBNo earlier than 1 year and no later than 14 days before the execution date • based on an invoice or similar document Possible deviations: • Agree a shorter period than 14 days with the debtor • in a separate agreement between the debtor and creditor • using a clause in the mandate (clearly separated from the compulsory parts) • a single payment plan instead of individual invoices for recurring payments

  21. SDD in detail - Timeline D-5 one off/first D-2 Recurrent D-14 Pre-notification D Due date = settlement D+8w refund D+13m refund unauthorized D+5 return SDD Core D+13m refund unauthorized D Due date = settlement D+2 return D-1 D-14 Pre-notification SDD B2B D-5 Pre-notification D-1 D Pivot date = due date D+1 Settlement/unpaid D+8w refund D+13m refund unauthorized DOM80 21

  22. SDD in detail - R transactions 1 . SDD Sequence type sent Type of R - trx Next collection with same by the Creditor mandate based on R - Before Due Date: Pacs.002 Reject transaction received or Request for Cancellation (RFC) Camt.056 After Due Date: Pacs.004 Return/Refund 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

  23. SDD in detail - R transactions • The refund right is unconditional The debtor requests the refund without having to give a reason and the debtor's bank immediately reimburses the debtor without any loss to the debtor. • The creditor will • be debited for the original amount + a refund compensation fee • see the result in his statements / CODA reporting incl. the original reference

  24. Starting with SDD 4 possible scenarios: • Migration from DOM80 to SDD (Core) • Transition from DOM80 to SDD B2B • Starting with SDD Core • Starting with SDD B2B

  25. Starting with SDD - Migration from DOM80 to SDD Core • Sign creditor contract • Manage mandates • Avoid creation of new DOM80 mandates if needed • Overview of existing DOM80 mandates (incl. IBAN/BIC) from NBB via your bank • assign unique mandate references • Send collections • Send prenotification (invoice) • Send collection file to the bank (mandate lifecycle!) • Follow up on collections • Once the collection has been booked, the mandate has been irrevocably migrated. • Cancellation of the DOM80 creditor number

  26. Starting with SDD - Transition from DOM80 to SDD B2B Impossible to migrate; new mandates are required! • Reachability check http://epc.cbnet.info/content/adherence_database • Sign creditor contract • Manage mandates • avoid creation of new DOM80 mandates if needed • create new mandates • + inform debtor about the need to confirm the mandate • Send collections • send prenotification (invoice) • send collection file to the bank (mandate lifecycle!) • Follow up on collections • Cancellation of the DOM80 creditor number

  27. Sign creditor contract Manage mandates create new mandates Send collections send prenotification (invoice) send collection files to the bank (mandate lifecycle!) Follow up on collections Starting with SDD - SDD core

  28. Reachability check http://epc.cbnet.info/content/adherence_database Sign creditor contract Manage mandates create new mandates inform debtor about the need to confirm the mandate Send collections send prenotification (invoice) send collection files to the bank (mandate lifecycle!) Follow up on collections Starting with SDD - SDD B2B

  29. The SDD migration project Start now ! Do not underestimate required time & efforts Inventory Implementation Planning Preparation Testing Business as usual Procedures SDD contract Inform debtors Tools Migration plan Involved parties Manage mandates Send collections Collection files Communicationplan Databases Collectionset up Follow up Reporting Training plan IT architecture Adaptprocedures

  30. Communication

  31. 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."

  32. Communication plan NBB (March 2012 – February 2014)

  33. Communication - Support NBB • Toolkit • One pager • Videos • PPT Presentations • Links: ECB, EPC, Febelfin,... • Other • Presentations • Documentation • Op demand...

  34. Communicatie - Support NBB

  35. Useful SEPA links • SEPA Belgium(www.sepabelgium.be) • Febelfin(www.febelfin.be) “Mijn geld en ik" – "Betalingen van a tot z – Betalen in de praktijk” • NBB (www.nbb.be/sepa)“Betalingssystemen – SEPA” • European Payments Council (EPC) (www.europeanpaymentscouncil.eu) • ISO 20022 standard(www.iso20022.org)

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