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Single European Payments Area Belgian Financial Forum, 30th May 2006

Single European Payments Area Belgian Financial Forum, 30th May 2006. SEPA-components : Credit transfers and direct debits. __________________________________________________________________ Antoon Termote Senior General Manager Group Payments, KBC Group.

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Single European Payments Area Belgian Financial Forum, 30th May 2006

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  1. Single European Payments AreaBelgian Financial Forum, 30th May 2006 SEPA-components : Credit transfers and direct debits __________________________________________________________________Antoon TermoteSenior General Manager Group Payments, KBC Group

  2. Political objective of the European Commission March 2000 (Lisbon Summit) Make Europe the most dynamic and competitive economy by 2010. This means: • Strengthening the Internal market by removing obstacles to trade in goods and services • Developing efficient, cheap and secure payment system and instruments • Setting up a New Legal Framework for all payments in the Internal Market Belgian Financial Forum

  3. SEPA-Timeline for action SEPA for infrastructure SEPA for citizens EC Reg 2560 cap increase 50.000 € EC Reg. 2560 EURO 2002 2003 2004 2005 2006 2007 2008 2009 2010 Belgian Financial Forum

  4. SEPA structure SEPA will be built on three pillars supported by the NLF that creates the legal base NEW LEGAL FRAMEWORK SEPA SEPA SEPA DIRECT CREDIT CARDS DEBIT TRANSF FRAME - SCHEME SCHEME WORK IBAN/BIC Infrastructure Belgian Financial Forum

  5. SEPA applicability EFTA EU 25 Eurozone SEPA • 1 Product standard • 1 ? Infrastructure • 29 countries Present situation • National schemes and standards • Usage and habits divergent from country to country • Different laws Belgian Financial Forum

  6. The SEPA framework is standardizing the bank-to-bank payment process. SEPA “products” including bank value-add EPC rulebooks PE-ACH Originator‘s Bank Beneficiary’s Bank Originator Beneficiary Phone Banking ? CODA ? Belgian Financial Forum

  7. SEPA Credit Transfer • Customer Account Number : IBAN - BIC • Form : new layout (after 35 years) • Execution Time : 2010  all transfers D+1 • File layout • Cut-off time : now continuously ; SEPA depends on operator • STP • Free message length • Structured message :to be defined Belgian Financial Forum

  8. SEPA Direct Debit • Mandate : at beneficiary • Mandate revocation : with beneficiary • Payer complaint : up to 6 weeks • File layout • Cut-off time file remittance • Value dating payer and payee • Pan-European system Belgian Financial Forum

  9. IBAN & BIC Belgium 539-0075470-34 IBAN BE68 5390 0754 7034 BIC BANKBEBB • France 18206 00010 30569664001 17 IBAN FR76 1820 6000 1030 5696 6400 117 BIC BANKFRPP882 • The Netherlands 12.34.56.789 IBAN NL97 BANK 0123 4567 89 BIC BANLNL2A Belgian Financial Forum

  10. Credit Transfers in practice Present situation • Use of SRI1 • Value date IEP2D+3 • Use of BBAN credit transfer form 1 Structured Remittance Information 2 Intra EEA EUR Payments SEPA No SRI available Value date IEP from 2008  D+3from 2010  D+1No SEPA credit transfer form available Belgian application Continued support of SRI on Belgian level Value date IEP from 2008  D+3 from 2010  D+1 Belgian SEPA credit transfer form will be created Belgian Financial Forum

  11. Draft Belgian Credit Transfer Form Belgian Financial Forum

  12. Direct debits in practice Present situation • National system • Refusal order possible till D+4 days • Administration mandates at debtors bank SEPA Pan-European orders will be possible Refusal order possible till D+6 weeksAdministration mandates with creditor Belgian application National and cross- border orders in one system Extension refusal period till D+6 weeks Migration of administration to creditor Belgian Financial Forum

  13. Impact on Consumers European dimension: • bank tariffs  converge • consumer protection  common • account number  change to IBAN • bank accounts with same payment instruction  common standards • time-schedule & cut-off time  common • Straight Through Processing  common • cross-border direct debits  new product Belgian dimension : • one-of direct debit  new product • long period (6weeks) to refuse direct debit order Belgian Financial Forum

  14. Impact on SME & Corporates European dimension: Idem Private customers + • interfaces with ERP • use of ISO standards • guaranteed remittance dates • optimize number of bankaccounts and bankrelations • steering of payment traffic depending on ‘European’ conditions Belgian dimension : • administration direct debit with companies (creditor) • uncertainty on collection of direct debit orders (long refusal period) Belgian Financial Forum

  15. Payments market in the Eurozone • Depending on the country, current behaviour is very different. • To what extent will SEPA influence the pattern of behaviour ? • What will be the effect of standardization on competition ? • What will be the effect on the processing of payment transactions ? Source: World Payments Report Belgian Financial Forum

  16. Changes in Euroland • The banks rose to the challenge … • … but neither is the Commission satisfied … (Consultative Paper on SEPA Incentives, 13 Feb 06) • … nor is the European Central Bank ! (Towards a Single Euro Payments Area, 4th progress report, 17 Feb 06) Belgian Financial Forum

  17. Making the dream become a reality • SEPA is a goal for the European Union, designed to make Europe the World’s leading economy by 2010 • All stakeholders are involved to realize SEPA (retail, wholesale, public authorities, government, national bank, banks, …) Belgian Financial Forum

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