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Migration of the Netherlands to the Single Euro Payments Area Michiel van Doeveren Equens-DACT SEPA-t

De Nederlandsche Bank. Migration of the Netherlands to the Single Euro Payments Area Michiel van Doeveren Equens-DACT SEPA-training Utrecht 6 december 2011. Johannes Vermeer – The Milkmaid 1658. Agenda. Backround of SEPA SEPA-products Impact of SEPA

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Migration of the Netherlands to the Single Euro Payments Area Michiel van Doeveren Equens-DACT SEPA-t

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  1. De Nederlandsche Bank Migration of the Netherlands to the Single Euro Payments Area Michiel van Doeveren Equens-DACT SEPA-training Utrecht 6 december 2011

  2. Johannes Vermeer – The Milkmaid 1658

  3. Agenda • Backround of SEPA • SEPA-products • Impact of SEPA • National SEPA Migration Plan and status of migration • Concluding remarks

  4. European Payment Market EU Bron: ECB, Eurostat

  5. Payment Trends in the EU Number of transactions per type of payment intrument (billions) Source ECB

  6. The euro is the common currency of 17 countries today, but retail paymentsare still organised nationally € € € € € € € € € € € € € € € € €

  7. SEPA means an uniform payments market EU € € € € € € € € € € € € € € € € €

  8. 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

  9. Payment chain debit credit payment instruction payment information bank bank clearing payment information credit debit payment instruction seller buyer good/service

  10. SEPA Credit Transfer (in use since 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

  11. SEPA Direct Debit(introduced in 2009) • SEPA Direct Debit: Standard for bank to bank Direct Debits in euro (B2C and B2B) • 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

  12. SEPA Regulation • End dates: • 1 February 2014 uniform end-date national credit transfers and national direct debits • 1 August 2015 niche products SCT and 1 August 2016 niche products SDD • Conversion facilities IBAN for consumers and XML services for firms until 1 August 2016 • Technical requirements: consumer demands w.r.t. the SDD, white listing, black listing, maximum size and frequency • No MIF SDD after 2016-2018 • Role of Trilogue European Commission published the draft SEPA-Regulation on 16 December 2010

  13. SEPA for CardsVision 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

  14. SEPA for CardsVision 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’

  15. Migration to SEPA • Aim: a smooth migration to SEPA • To organise nationally • Market driven within the limits of the SEPA- Regulation • Speed can differ between countries • Stakeholders’ involvement and communication are important tools for success • Clear end dates

  16. 1 February: end-date SCT & SDD migration InfrastructureSEPA proof for mass migration Specifications SEPA proof basic products for businesses SDD adapted to consumer protection measures regulation SCT SDD 2012 1-10 2013 1-3 1-7 2014 Possibleuse of niche products after end-date Banks SEPA proof infrastructure Support migration end-users Software suppliers SEPA proof software packages Support migration end-users Large-scale enterprises SCT Early movers Mass migration SMEs SCT only Early movers Mass migration Large-scaleenterprises all Early movers Mass migration SMEs SCT & SDD Early movers Mass migration Consumers Growing use of IBAN Communication Communication from umbrella organisations, intermediaries, banks Public campaign

  17. Migration status SCT Transactions processed in SEPA format as % of total transactions

  18. Aim of the SEPA Migration Monitor Insight into the status of SEPA migration ofcorporates, public authorities and software suppliers 1. Awareness of the meaning and implications of SEPA Stage of preparations Actual use of SEPA payment instruments Development of software packages

  19. Results: Awareness users Large companies, public authorities and a large part of the local authorities and software companies know what SEPA is. More than 80% of the SME doesn’t know what SEPA is. 36% of the middle-large companies doesn’t know what SEPA is.

  20. Results: Awareness users Information needs SME: general information Middle-large companies: general information Large companies: exact end dates; e-mandates Local authorities: exact end dates; general information Public authorities: nowhere, progress introduction in NL Most often named information sources SME: homebank, accountant, DNB Middle-large companies: homebank, DNB, government Large companies: homebank, DNB, government Local authorities: homebank, ICT provider, DNB Public authorities: SPPS, DNB

  21. Results SEPA Credit Transfer (SCT) • A small percentage now only pays with SCT • With the local authorities the situation is hardly changed since the last monitor. • With the large companies a worsening seem to have taken place. • A large part of the SMEs is still far behind, but did progress. Now 78% has done nothing yet.

  22. Results SEPA Direct Debit (SDD) • With the public authorities and large companies a worsening seems to have taken place in comparison to the last monitor. • With the local authorities the situation hasn’t changed. • With the middle-large companies a small improvement is visible. By now 4% uses the SDD. • 93% of the SMEs has done (almost) nothing in preperation.

  23. Results softwareproviders

  24. Concluding Remarks The success of SEPA depends on: • An end date for national payment instruments (SEPA-Regulation) • SEPA for Cards means ‘Any card at any terminal’. This requires time. • Further European standardisation, which is not easy • Well organised stakeholder involvement and consultation • The implementation of the Netherlands’ SEPA Migration Plan

  25. Questions?

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