Single Euro Payments Area : EACT favours setting an end date for SEPA Credit Transfer

CFO News

17 October 2008

EACT strongly emphasizes that the completion of SEPA is a prerequisite to an efficient working capital management in corporates, opening the door to cross border end-to-end straight through processing.

Corporate treasurers, like other stakeholders, have been invited by the European Payments Council in a Customers Stakeholders Forum to review and enhance the SEPA rulebooks developed by the banks during the past years. SEPA Credit Transfer seems to be at the time the only mature instrument almost satisfying all stakeholders.

In order to achieve a more efficient and transparent payments landscape, EACT recognizes the need to agree with all market participants on a deadline by which the legacy systems will be deactivated. This will enable all stakeholders a proper, harmonized and meaningful migration planning. As there are only a few but none the less important enhancements needed to make the SCT an attractive payment instrument for the corporate treasurers (see the notes for Editors), the EACT proposes to commit to an end date linked to the solution of the issues indicated by EACT, their incorporation in a future SCT Rulebook, and the market availability of the SCT features requested.

To ensure sufficient time for controlling the risk and cost of the transition to SCT, a 24 month period after the rulebook availability and an 18 month period after market availability is necessary.

In order to make a smooth transition, EACT strongly recommends that the switch takes place anytime between March and September in order to avoid year-end complications.

Olivier Brissaud, the EACT board member in charge of European Affairs, has played an active part as co-chair of the European Payments Council’s Customer Stakeholders Forum. Olivier Brissaud said: “It is vital that introduction of the SEPA Credit Transfer takes place at an agreed date and only after the EPC has completed its rulebook and the banking market has fully addressed the outstanding questions. Failure to resolve these remaining issues will create unacceptable risks and costs for the corporate community”.

Note for Editors :
EACT has identified the following enhancements to the SCT Rulebooks:
1. "Same Day Value" payments and “Guaranteed value date to beneficiary”
2. “Optional” BIC codes
3. Standard Bank Reporting of SEPA data
4. ISO and non-ISO 140 chars EACT Remittance information
5. Check Unique Entity Identifier (UEI) of beneficiary *
6. Report “Requested Execution Date” and remove semantic confusion
7. SEPA Banks agree to an end-date to accept ISO 20022 Payment Initiation messages.

NOTES : all seven points are in EPC’s remit.
*Point N. 5 requires an additional explanation.
A Unique Entity Identifier (UEI) is a long-standing request of the EACT. In SEPA, a code is needed to identify creditors of SDD and, we maintain, all account
owners. This code should be an “international” one. ISO will soon examine a proposal in this sense. EACT request to the EPC is an AOS allowing banks to credit an SCT to an account based on the IBAN and the UEI, if this item is present in the payment order. No change is required in the SCT format (the field is already provided in the message).

German Operators Launch Mobile Payments Service

Cellular news
17th October 2008

Two German operators, O2 and Vodafone are launching a mobile payment service today (Friday), branded as mpass. The new mpass service combines the proven direct debiting scheme with a SMS payment confirmation on the mobile phone. In practice, this means that customers will in future be able to order a product in the internet shop or on the mobile portal. All they have to do is enter the mobile number and a mpass PIN of their choice.

The customers will subsequently receive a SMS which they confirm and get the amount debited from their bank account automatically.

The operators said that payment through two independent communications media significantly increases the security as entering sensitive and personal data like bank details and credit card numbers is not required anymore.

Lutz Schüler, General Manager, Marketing & Sales for Telefónica O2 Germany: "Our customers ask for simple and smart solutions. Our payment system takes account of this request. Effective immediately and without the need to register, the system offers about 14 million contract customers of Vodafone and O2 the possibility to pay online in an easy, rapid and secure manner - at home and on the go."

Dr. Peter Walz, Member of the Executive Committee of Vodafone Deutschland and Director Arcor AG Strategy and Partner Companies: "The innovative payment service not only meets customer requirements. In addition, the payment method offers retailers many benefits like more efficient accounting processes or the acquisition of new customers who have been skeptical towards shopping and paying in cyberspace so far."

Do European businesses seize SEPA opportunities? Survey conducted by Atos Consulting and Deloitte gives answers

WEBWIRE – Tuesday, September 30, 2008

Do European businesses seize SEPA opportunities? Survey conducted by Atos Consulting and Deloitte gives answers

Rotterdam/Utrecht, The launch of SEPA Credit Transfer in January 2007 marked the first tentative step towards the implementation of SEPA (Single Euro Payments Area). However, European businesses are insufficiently prepared for the implications of SEPA and seize its opportunities. Furthermore, the banking sector seems unable to offer reliable and adequate support to the businessworld. These are the findings of the SEPA survey conducted by Atos Consulting and Deloitte among the members of the European Association of Corporate Treasurers in 9 European countries. The full report will be presented at EuroFinance conference in Barcelona on 1 October 2008.

“This survey not only gauges the level of familiarity with SEPA among the business community, it creates familiarity at the same time”, explains Olivier Brissaud, chairman of the European Association of Corporate Treasurers.

Although the implementation of SEPA will require considerable investment, it is widely expected to be highly profitable. Various studies confidently predict revenues of between EUR 50 and EUR 175 billion over the next 6 years. Although European businesses are aware of the cost savings potential and opportunities presented by SEPA, 43% of respondents are unable to quantify the investments required, while 48% have no clear insight into the financial benefits arising from SEPA.

Banking sector missing out on golden opportunities
Whilst most respondents (84%) are familiar with SEPA, 79% are not ready to implement SEPA and 80% have failed to draw up a strategy. Banks play an important role in implementing SEPA on behalf of the business community, but are missing out on golden opportunities. Only 56% of respondents have been approached by their bank to discuss SEPA, and only 53% of banks have suggested a solution. According to respondents, only 26% of banks have suggested a suitable solution.

Seizing opportunities
"Companies are aware of the opportunities presented by SEPA. The next step is to seize these opportunities and translate them into genuine cost savings by improving cash- and treasury management via uniform pan-European transmission and via improved account management”, believes Folkert Zwinkels, partner at Deloitte.

“To further stimulate the necessary adoption of SEPA it is vital that banks join forces with appropriate partners and support businesses with suitable solutions that facilitate the successful launch of SEPA", Paul van der Knaap, partner at Atos Consulting concludes.

The aim of SEPA - an initiative of the European Commission - is to move towards a fully harmonised European payments area, in which enhanced transparency and competition will eventually result in more efficient and cheaper payment transactions. SEPA Credit Transfer (SCT), the pan-European standard in electronic transfers, was launched on 28 January 2008. The European variant of the automatic debt collection system, the SEPA Direct Debit (SDD), is expected to go live in 2009.

About Atos Origin
Atos Origin is an international information technology services company. Its business is turning client vision into results through the application of consulting, systems integration and managed operations. The company’s annual revenues are EUR 5.8 billion and it employs 50,000 people in 40 countries. Atos Origin is the Worldwide Information Technology Partner for the Olympic Games and has a client base of international blue-chip companies across all sectors. Atos Origin is quoted on the Paris Eurolist Market and trades as Atos Origin, Atos Worldline and Atos Consulting.

About Atos Consulting
Atos Consulting, the global consulting practice of Atos Origin, is a leading provider of business, process and technology consulting services. With more than 2,500 staff globally, it focuses on delivering proven, pragmatic solutions to the telecom, manufacturing, financial services and public sectors.

About Deloitte Touche Tohmatsu
Deloitte Touche Tohmatsu is an organisation of independent member firms focused on providing top-quality professional services and advice. Our service is based on a worldwide strategy for about 140 countries. The expertise of 150,000 professionals from all over the globe and the offices of our member firms helps make this a reality. Services are offered in four professional disciplines: accounting, tax advice, consulting and financial advice. Our member firms work for some of the world’s largest corporations as well as national companies, the public sector and fast-growing businesses. Deloitte Touche Tohmatsu is a Swiss Verein. Neither Deloitte Touche Tohmatsu or any of the member firms accept responsibility for the actions or negligence of other member firms. Each member firm is an independent legal unit working under ‘Deloitte’, ‘Deloitte & Touche’, ‘Deloitte Touche Tohmatsu’ or any other related name. The services outlined in this publication are provided by the member firm in question and not by Deloitte Touche Tohmatsu Verein.