SEPA Maatschappelijk overleg betreffende het Betaalverkeer Débat sociétal sur les moyens de paiement Nationale Bank van België Banque nationale de Belgique 03/05/2012 Koepelorganisaties Fédérations Jan Vermeulen Axelle Waterkeyn

SEPA info session federations - 3 may / 44 Agenda ► What is SEPA (JV) ► Status of SEPA (AW) ● in Belgium ● in Europe ► Legal framework (JV) ● New Regulation on end-dates for SEPA migration ► Lessons learnt from Electrabel, the early mover to SDD (AW) ► Next steps and questions (JV)

SEPA info session federations - 3 may / 44 What is SEPA?

SEPA info session federations - 3 may / 44 SEPA: objective EFTA EU27 Eurozone  € payments within 32 countries*  99 % of all our non-cash payments are affected  impact SEPA > introduction € cash * 32 countries: EU + Norway, Liechtenstein, Iceland, Switzerland & Monaco

SEPA info session federations - 3 may / 44 SEPA: Major players EPC

SEPA info session federations - 3 may / 44 SEPA Payment instruments 01/ /2009 SEPA credit transfer Public authorities as first movers Followed by big billers SEPA Direct Debit STOP! National CT National DD Technical, contractual and business standards SEPA cards 02/2014 First big biller migrates end 11/2011

SEPA info session federations - 3 may / 44 PE-ACH Payment system SEPA benefits

SEPA info session federations - 3 may / 44 ► National Bank of Belgium ● "Maatschappelijk overleg Betaalverkeer (MoB)" ● "Débat sociétal sur les moyens de paiement" ● "Societal debate on the future of payment means" SEPA working groups  Public authorities  Consumers  Businesses SEPA migration - organisation in Belgium

SEPA info session federations - 3 may / 44 SEPA migration - organisation in Belgium ► Aim of today ● Information delivery on General progress of SEPA New End-date Regulation Experiences first mover Non-commercial related questions ● Contactpersons for further exchange of information ● Spread the "SEPA" word!

SEPA info session federations - 3 may / 44 SEPA, status in Belgium & Europe

SEPA info session federations - 3 may / 44 State of play - SCT

SEPA info session federations - 3 may / 44 State of play - SCT

SEPA info session federations - 3 may / 44 State of play - SCT ► Last figures in Belgium: 53.8% (March 2012) ► 01/01/2011: stop processing old paper forms ► New folder on SCT migration

SEPA info session federations - 3 may / 44

SEPA info session federations - 3 may / 44 State of play - SDD Electrabel BE

SEPA info session federations - 3 may / 44 European developments ► SDD Fixed amount scheme ● EPC scheme ● Code of conduct ? ► European Commission Green Paper ● "Towards an integrated European market for card, internet and mobile payments." Consultation process until 11 April 2012 See: ► European Commission's proposal on an end-date for migration to SEPA

SEPA info session federations - 3 may / 44 Legal Framework

SEPA info session federations - 3 may / 44 SEPA legal framework ► Payment Services Directive 2007/64/EC (PSD) ● Wet betreffende de betalingsdiensten/Loi relative aux services de paiement Transparency of conditions and information requirements for payment services Rights and obligations to the provision and use of payment services ● Wet betreffende het statuut van de betalingsinstellingen /Loi relative au statut des établissements de paiement Establishment of "Payment Institutions" ► Regulation 924/2009 on cross border payments ● Equal charges for national and cross border payments ► Regulation establishing technical and business requirements for credit transfers and direct debits in euros

SEPA info session federations - 3 may / 44 Regulation of the European Parliament and of the Council ► Regulation establishing technical and business requirements for credit transfers and direct debits in euros ► Règlement établissant des exigences techniques et commerciales pour les virements et les prélèvements en euros ► Verordening tot vaststelling van technische en bedrijfsmatige vereisten voor overmakingen en automatische afschrijvingen in euro LINK: NL= FR=

SEPA info session federations - 3 may / 44 Regulation of the European Parliament and of the Council ► Proposal from the Commission -16 December 2010 ► Adoption on 14/03/2012 ► Published in Official Journal on 30/03/2012

SEPA info session federations - 3 may / 44 Regulation, article 1 ► Article 1: Scope ● credit transfers and direct debit in € within the EU both legs in the EU ● out of scope: cards mobile payments money remittance e-money

SEPA info session federations - 3 may / 44 Regulation, article 6 ► Article 6: End dates ● "Credit transfers shall be carried out in accordance with the requirements... by 1 February 2014" ● "Direct debits shall be carried out in accordance with the requirements... by 1 February 2014" ► Technical requirements in Annex

SEPA info session federations - 3 may / 44 Regulation, article 5 ► Article 5: Requirements for credit transfer and direct debit transactions ► Technical requirements in Annex ► more or less in line with European Payment Council (EPC) Rulebooks ● Use IBAN & BIC ● Use ISO20022 ● Data fields ●...

SEPA info session federations - 3 may / 44 Regulation, article 5 ► Article 5: Requirements for credit transfer and direct debit transactions ► more or less in line with European Payment Council (EPC) Rulebooks ● Credit transfers IBAN only !  from 01/02/2014 for national payments »but possibility to postpone per country  from 01/02/2016 for cross border payments ● Direct debits "... payers shall have the possibility to:  instruct their PSP to limit a direct debit collection to a certain amount or periodicity, or both;  request their PSP, where there is no refund right according to the PSD, to verify each direct debit transaction and to check whether the amount and periodicity of the submitted direct debit transaction is equal to the amount agtreed in the mandate;  instruct their PSP to block any direct debits to their account or to block any direct debits coming from one or more specified payees or to autorise direct debits only coming from one or more specified payees." but not applicable for B2B!

SEPA info session federations - 3 may / 44 Regulation, article 5, continued ● "The PSP shall ensure that a Payment Service User (PSU) that is not a customer or a micro-enterprise, and initiates or receives individual credit transfers or direct debits which are bundled together for transmission, uses message formats ISO20022." Option to postpone until 01/02/2016.

SEPA info session federations - 3 may / 44 Regulation, article 3 & 9 ► Article 3: Reachability ● "... the payment service provider (PSP) of the payee... shall be reachable... for credit transfers... initiated... in any member state... " ● "... the payment service provider (PSP) of the payer... shall be reachable... for direct debit transactions... initiated by a payee... in any member state... " only for "consumers", not for B2B ► Article 9: Payment accessibility ● "A payer making a credit transfer up to € to a payee with a payment account located within the Union shall not specify in which member state the that payment account should be located..." ● " A payee using a direct debit to collect funds up to € from a payer with a payment account located within the Union shall not specify in which member state that payment account should be located.. " ► Conclusion: ● Credit transfers have to be credited on an account regardless where the account is held ● Direct debit can be made regardless where the payee/payer hold their account

SEPA info session federations - 3 may / 44 Regulation, article 8 ► Article 8: Interchange fees for direct debit transactions ● "the aim of the European Commission is to create neutral conditions for competition between PSP's" ● "... no multilateral interchange fees per direct debit transaction or other agreed remuneration with an equivalent object or effect shall apply to direct debit transactions." Exception for "R-transactions", if they are cost-based

SEPA info session federations - 3 may / 44 Regulation, article 16 ► Transitional provisions ● Credit transfer niche products (less than 10%, 01/02/2016) ● Direct Debit niche products (less than 10%, 01/02/2016) ● Allow PSPs to provide conversion services for national payment transactions to consumers tot 01/02/2016 ● Non-euro area countries

SEPA info session federations - 3 may / 44 Regulation, article 17: Amendments to Regulation (EC) N° 924/2009 ► Charges levied by a payment service provider on a payment service user in respect of cross-border payments shall be the same as the charges levied for corresponding national payments ● the € treshold disappears!

SEPA info session federations - 3 may / 44 Regulation, overview per item SEPA End DateCT and DD1 Feb 2014 Non-euro area MS31 Oct 2016 DD MIF End DateCross-border1 Nov 2012 Domestic1 Feb 2017 Phase-out of BICDomestic1 Feb 2014 (could be deferred by MS until 1 Feb 2016) Cross-border1 Feb 2016 Conversion facilities ISO XML National account numbers Payment service users 1 Feb 2016 (if opted in by MS) Phase-out niche productsCT and DD1 Feb 2016 InteroperabilityEuro area MS1 Feb 2014 Non-euro area MS31 Oct 2016 Payment card at POS resulting in a direct debit e.g. the German ELV1 Feb 2016 source: ECB

SEPA info session federations - 3 may / 44 Regulation, overview of the dates

SEPA info session federations - 3 may / 44 Regulation: conclusions ► Published ► Strict deadlines ► Use of ISO20022 ► Time to ● Start migration to SCT for those who did not yet start ● Plan SDD migration

SEPA info session federations - 3 may / 44 Lessons learnt from Electrabel

SEPA info session federations - 3 may / 44 SDD 'Big billers' January 2012

SEPA info session federations - 3 may / 44 Case study November 2011

SEPA info session federations - 3 may / 44 Migration work (1) ► On master data ● Cleaning ● Verify the quality & completeness of BNB file (debugging) ● Verify the quality of your data ● Enrichment IBAN before go live to reduce conversion time ● Pro – active and after care process if not possible to convert

SEPA info session federations - 3 may / 44 Migration work (2) ► On testing ● Real productive End2End SDD & SCT test ● Mass tests files (volumes) ► On Customer ● Information mandatory

SEPA info session federations - 3 may / 44 Lessons learnt (1) ► New business rules ► New master data mandate management ● Create, modify, delete, scanning, archiving ● R-Transactions : impact on process, data,… ► New file format ► New interfaces with bank e.g. upgrade Isabel ► New documents : Letters, footers,… ► New reports to create ► New hardware / software e.g. scanner, …

SEPA info session federations - 3 may / 44 Lessons learnt (2) ► A Program structure with a budget and dedicated ressources ► A Planning (Time not to underestimate) ► To start it as fast as possible, It takes time ► To choose your bank(s) partners as quickly as possible ► To create awareness internal & external ► To train everybody ► Tests Tests Tests and Tests ► To inform your customer

SEPA info session federations - 3 may / 44 Next steps

SEPA info session federations - 3 may / 44 Next steps ► Organise Steering Committee on the Future of Payment Means ● NBB invites your CEOs ● Present Progress report on the migration towards SEPA Focus on communication campaign ● Publish report ● Collect information from you on your planning

SEPA info session federations - 3 may / 44 Next steps /01 Start SEPA AprilQ4 aangifte met brochure op aanvraag aanslag met SEPA- formulier Q1 stop verzending oude formulieren stop verwerking oude formulieren 31/12 Q3 Q2 Q4 jan feb maa Example migration SCT

SEPA info session federations - 3 may / 44 Next steps: migration SDD NovembreAvril START SDD PSD entry into force Q2Q3Q4Q Q2Q3Q4Q1 321

SEPA info session federations - 3 may / 44 Information and Contacts ► your bank... ► Febelfin ● ► NBB ● ● Jan Vermeulen tel ● Axelle Waterkeyn tel ● ► European Commission ● ► EPC ●