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

2. MOB Big Billers - 18/01/2013 2 / 35 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. MOB Big Billers - 18/01/2013 3 / 35 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. MOB Big Billers - 18/01/2013 4 / 35 SEPA - End date regulation 2009201020112013 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

5. MOB Big Billers - 18/01/2013 5 / 35 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

6. SEPA Credit Transfer

7. MOB Big Billers - 18/01/2013 7 / 35 Graphic 1: Transfers in SEPA format (2008 - November 2012) (% of the total number of bank transfers) Sources: European Central Bank (ECB) and the Centre for Exchange and Clearing (CEC). 1,91% 16,07% 33,33% 38,83% 44,71% 45,09% 47,66% 52,30% 58,03% 59,80% 61,25% 1,80% 6,20% 13,90% 16,86% 20,50% 21,07% 23,71% 27,16% 29,57% 30,30% 30,18% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% CEC Euro area CSMs

8. MOB Big Billers - 18/01/2013 8 / 35 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 8 40% to go

9. MOB Big Billers - 18/01/2013 9 / 35 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. MOB Big Billers - 18/01/2013 11 / 35 Migration to SDD in Belgium (July 2011 - July 2012)

12. MOB Big Billers - 18/01/2013 12 / 35 SDD transactions in Europe Source: ECB 0,00 0,50 1,00 1,50 2,00 2,50 0 2 4 6 8 10 12 14 % share of SDDs Transactions (millions) Volum e Share SDD

13. MOB Big Billers - 18/01/2013 13 / 35 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% % Mandates Number of companies

14. MOB Big Billers - 18/01/2013 14 / 35 (Provisional) plans for migration towards the SDD by some of the big billers 20092010 2011 November April Start SDD End date Regulation Q2Q3Q4Q1 2012 2013 Q2Q3Q4Q1 01/02 2014

15. MOB Big Billers - 18/01/2013 15 / 35 Mandate management - SDD vs DOM80 2) Prenotification (bill) New!! Debtor Creditor bank Debtor bank 5) Debit 1) Mandate 6) 4) 3) XML collection file + MRI Creditor 4) collection 6) Clearing & settlement mechanism New!! Debtor Creditor bank Debtor bank Mandate management Creditor Mandate management 6) Credit 1) Mandate Informs Debtor bank 1b) mandate confirmation B2B!!

16. MOB Big Billers - 18/01/2013 16 / 35 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. MOB Big Billers - 18/01/2013 17 / 35 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. Mandate management - The mandate

18. MOB Big Billers - 18/01/2013 18 / 35 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 a) either identical to the creditor's Belgian business number (10 positions) b) or ‘bank code’ + ‘D’ + a bank counter (max. 24 positions) Mandate management - Creditor ID

19. MOB Big Billers - 18/01/2013 19 / 35 Mandate management - Changes SDD rulebook says for changes in: 1. Unique Mandate Reference 2. creditor identification 3. creditor name 4. debtor’s account number A.to another number within the same bank B.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. MOB Big Billers - 18/01/2013 20 / 35 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 SDD in detail - Prenotification

21. MOB Big Billers - 18/01/2013 21 / 35 21 SDD Core D-14 Pre-notification D-5 one off/first D-2 Recurrent D+5 return D+8w refund D+13m refund unauthorized D Due date = settlement SDD B2B D-14 Pre-notification D+2 return D-1 D Due date = settlement D+13m refund unauthorized D Pivot date = due date D-1D-5 Pre-notification DOM80 D+1 Settlement/unpaid D+8w refund D+13m refund unauthorized SDD in detail - Timeline

22. MOB Big Billers - 18/01/2013 22 / 35 SDD in detail - R transactions

23. MOB Big Billers - 18/01/2013 23 / 35 ► 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 SDD in detail - R transactions

24. MOB Big Billers - 18/01/2013 24 / 35 4 possible scenarios: ► Migration from DOM80 to SDD (Core) ► Transition from DOM80 to SDD B2B ► Starting with SDD Core ► Starting with SDD B2B Starting with SDD

25. MOB Big Billers - 18/01/2013 25 / 35 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. MOB Big Billers - 18/01/2013 26 / 35 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 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. MOB Big Billers - 18/01/2013 27 / 35 ► 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. MOB Big Billers - 18/01/2013 28 / 35 ► Reachability check http://epc.cbnet.info/content/adherence_database 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. MOB Big Billers - 18/01/2013 29 / 35 The SDD migration project Inventory Preparation Testing Implementation Planning Start now ! Business as usual Procedures Involved parties Databases IT architecture Migration plan Communication plan Training plan SDD contract Manage mandates Collection set up Adapt procedures Tools Collection files Reporting Inform debtors Send collections Follow up Do not underestimate required time & efforts

30. Communication

31. MOB Big Billers - 18/01/2013 31 / 35 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. MOB Big Billers - 18/01/2013 32 / 35 Communication plan NBB (March 2012 – February 2014)

33. MOB Big Billers - 18/01/2013 33 / 35 Communication - Support NBB ► Toolkit ● One pager ● Videos ● PPT Presentations ● Links: ECB, EPC, Febelfin,... ► Other ● Presentations ● Documentation ● Op demand...

34. MOB Big Billers - 18/01/2013 34 / 35 Communicatie - Support NBB

35. MOB Big Billers - 18/01/2013 35 / 35 Useful SEPA links ► SEPA Belgium (www.sepabelgium.be)www.sepabelgium.be ► Febelfin (www.febelfin.be) “Mijn geld en ik" – "Betalingen van a tot z – Betalen in de praktijk”www.febelfin.be ► NBB ( www.nbb.be/sepa ) “Betalingssystemen – SEPA” www.nbb.be/sepa ► European Payments Council (EPC) (www.europeanpaymentscouncil.eu)www.europeanpaymentscouncil.eu ► ISO 20022 standard (www.iso20022.org)www.iso20022.org