© 2007IBM Corporation
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IBM WebSphere Transformation Extender Pack for SEPAVersion 1.0
Customer Presentation
May 29 2007
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What is the Single Euro Payments Area (SEPA)?
It is a regulatory requirement that eliminates the distinction between cross-border and national payments within the European Union
It requires the removal of technical, legal and commercial barriers to enable a single “domestic” payments market for the whole European Area and will significantly improve trade in the Euro zone.
It will be the area where citizens, companies and other economic actors will be able to make and receive payments in euro, within Europe, whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location
This project aims to put an end to fragmentation by introducing, as from 2008, European payment instruments which are going to replace national ones by end-2010. The vision is that by end-2010 all retail payments in euro are carried out as easily, efficiently and safely across Europe as within national borders
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SEPA means new schemes and new processing infrastructures
Different methodologies have been adopted for :
1. Credit Transfers and Direct Debits got new Electronic Transfer Schemes (ETS) Key deliverables : SCT and SDD Rulebooks which detail core and basic services to enable a common level of service to users in a predictable timeframe
2. Card payments will get their schemes adapted Key deliverable : SCF states how issuers, acquirers, card schemes and operators must adapt their current operations to comply to SEPA
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SEPA Direct Debit (SDD) Processing
cf : Making SEPA a Reality, EPC066-06 version 1.3, page 40
• Currently important differences between the countries related to the mandate processing
• The transposition of the Directive into country law is not completed (impacts cross country DD)
• The main required changes of the bank’s processes are related to
•Mandate handling process to be reviewed and evt. rebuilt •different schemas might coexist for some time (country focused and cross country)•Same clearing and settlement actors as SCT•Same changes related to format and schema changes as SCT
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SEPA Credit Transfer (SCT) processing
• In general no important differenceto current transfer processing
• Not all types of existing credit transfers will be replaced by SCT. The actors need to ensure coexistence of the new with the existing schemas
• The main required changes of the bank’s processes are related to
•the coexistence of different schemas•the SEPA payments must apply the SEPA schemas•new / additional Clearing and Settlement actors are entering the market•The format choice given to the customers for issuing their payment orders cf : Making SEPA a Reality, EPC066-06 version 1.3, page 39
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SEPA Cards Framework
cf : Making SEPA a Reality, EPC066-06 version 1.3, page 45
• The SCF defines a series of high level principles and rules which need to be applied in SEPA
• Removal of commercial, technical and legal barriers
• Migration to EMV certified terminals with PIN pads
• Transparent pricing • Fraud prevention • ….
• Because of the technical complexity of the card systems and of the impact of SEPA has on this market (e.g.interchange fees) the definitive solutions to be implemented is still under investigation
• Belgium and Finland decided to replacenational scheme by EAPS (Euro Alliance of Payment Schemes)
Cards represent : 12 billion payment transactions and 6 billion cash withdrawal transactions per year done using 350 million cards in the Euro area
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Integration Challenges with SEPA
Transition from legacy systems to SEPA schemes will require significant investment.
Implementation of SEPA solutions across multiple geographies and national systems may lead to consolidation of small banks
SEPA’s data set (ISO 20022, a.k.a. UNIFI) is large, complex, and requires more than basic XML schema handling
SEPA’s rulebooks require not only format level compliance, but message content validation and implementation rule logic
Anticipated changes and updates to the SEPA Schema and Implementation Guidelines introduce risk to bespoke solutions
The breadth and overhead of the ISO 20022 schema, and the need to integrate with existing systems presents processing cost challenges and infrastructure architecture concerns for banks
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Extensive change across all participants
EPC Define schemes and charging conventions Define PEACH framework Define and implement certification procedures
25 National Banking / Payment Associations
Decision and timetable / transition on adoption of SEPA-compliant schemes
Decision on clearing infrastructures: fold into PEACH, merge, wind down
Review legal / contractual frameworks
8,000 Banks Transition to SEPA schemes: standards, operating
procedures, access network(s) Account number changes ? Customer education
2 million Corporate customers and government agencies
Transition to SEPA schemes: standards, operating procedures
Account number changes ? Review banking relationships outside home
member state
Service providers, operators, etc Define role and services within and/or outside
PEACH Transition to SEPA schemes: standards,
operating procedures, access network(s) Account number changes ?
Merchants Changes to terminals
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IBM provides the Industry’s Premiere Solutions for SEPA Implementation
SEPA Processor & Validation Product Offerings
SEPA Industry Framework Process & Payment Models
Integrating & Service Enabling Legacy Payment Systems
Industry Knowledge, Expertise and Best Practices
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WebSphere Transformation Extender with the Pack for SEPA can build a foundation for an Enterprise Payments Platform
Payment Processes
Data Model Based on ISO20022
Enterprise Payments Platform - Enterprise Service Bus -
Interfaces for Common Payment Functions
Gateway Services
WebSphere TXPre-built Monitoring Tools
Transform Services
ApplicationServices
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WebSphere Transformation Extender Pack for SEPA
For IBM Clients needing to develop their Single Euro Payments Area solution with
IBM WebSphere Transformation Extender.
SEPA Credit Transfer
SEPA Direct Debit
SEPA UNIFI Message and Content Validation
EPC Implementation Rules Validation
SEPA to SWIFT MT 103
Sample SEPA-Domestic converters
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End-to-end message flow and formats - Today
Bank S(sending)
Customer S(sending)
(PE)-ACH Bank R(receiving)
Customer R(receiving)
Account handling Customer S
Transfer to Bank R (via ACH)
Receive from Bank S (via ACH)
Account handling Customer R
ClearingInitiate Credit Transfer
Account Info Credit Transfer
Alternatively between large banks:Bilateral Clearing
D D D
F F
D
D
F
Domestic Format – country specific – only for in-country traffic
FIN Format MT103+ - for EU cross boarder credit transfers
PE-ACH : Pan European Automated Clearing House
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Bank S(sending)
Customer S(sending)
(PE)-ACH Bank R(receiving)
Customer R(receiving)
Account handling Customer S
Transfer to Bank R (via ACH)
Receive from Bank S (via ACH)
Account handling Customer R
ClearingInitiate Credit Transfer
Account Info Credit Transfer
Alternatively between large banks:Bilateral Clearing
S S S
S
S SEPA Format
End-to-end message flow and formats – Final SEPA
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Bank S(sending)
Customer S(sending)
(PE)-ACH Bank R(receiving)
Customer R(receiving)
Account handling Customer S
Transfer to Bank R (via ACH)
Receive from Bank S (via ACH)
Account handling Customer R
ClearingInitiate Credit Transfer
Account Info Credit Transfer
Alternatively between large banks:Bilateral Clearing
D S D S D S
F F
D S
D
S
F
Domestic Format – country specific – only for in-country traffic
SEPA Format
FIN Format MT103+ - for EU cross boarder credit transfers
End-to-end message flow and formats – Migration phase
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Bank interfaces and processing formats - Today
Bank
Processing in Domestic Format(existing)
Processing in FIN Format and Non-EU(existing)
D
F
D
FFrom PE-ACH Non-EU
To PE-ACH Non-EU
From Customer ACH other bank
To Customer ACH other bank
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Bank interfaces and processing formats – Final SEPA
Bank
Processing in SEPA Format(new)
S SFrom Customer ACH PE-ACH other Bank
To Customer ACH PE-ACH other Bank
Non-EU ProcessingF FFrom Non-EU To Non-EU
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Bank interfaces and processing formats - Migration
Bank
SEPA Format -> Domestic Format (country specific)
Processing in Domestic Format(existing)
Processing in SEPA Format(new)
Processing in FIN Format and Non-EU(existing)
D
S
F
D
S
F
SD
SD
DSDS
FS
SFFS
DS
FS
SF
Domestic Format (country specific) -> SEPA Format
FIN MT103+ Format -> SEPA Format
SEPA Format -> FIN MT103+ Format
S->D and S->F outbound not usefull
as all banks must be able to receive SEPA.
Inbound and outbound conversions probably
differ as different enrichment data available.
From PE-ACH Non-EU
To PE-ACH Non-EU
From Customer ACH
From Customer ACH PE-ACH
To Customer ACH
To Customer ACH PE-ACH
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Transform, validate, and enrich any document, message or complex data
Deliver trustworthy information for critical business initiatives
Meet regulatory compliance requirements
Codeless development; universal reuse and deployment
WebSphere TX: Universal Transformation & Reuse
“Make Advanced ESB More Advanced”
Embedded Standalone Event driven
MAP TRANSFORM
Advanced ESBESB
J2EE
App. ServerProcess Server
Standalone System z (native)
Windows, UNIX, Linux
Multi-In Multi-Out
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Design Studio - Map Designer
Drag and Drop Mapping
No code to write
Easily represent complex transformation rules
Local & Remote Debugging
Runs on Windows
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Why is WebSphere Transformation Extenderthe right solution for a SEPA Converter?
Natively runs in CICS, IMS and MVS on System Z, & distributed platforms
Provides Product-based maintenance updates to the SEPA formats and rules
Has massive scalability & throughput, with efficient processing of data
Recognized world-leader in financial services transformation
Reduce cost, time, and Reduce cost, time, and RISKRISK to implement and maintain to implement and maintain SEPA compliance into your existing operational SEPA compliance into your existing operational
infrastructure, now, and in the future.infrastructure, now, and in the future.
Can be leveraged by Process Server & Message broker implementations
Codeless design & customization mean easy linkages with existing systems
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SEPA Validation, Rules Compliance and Processingthrough WebSphere Transformation Extender
IBM’s Universal Transformation Engine
Thousands of Millions of Transactions and Trillions of Euros are processed by WTX across a variety of industry formats and custom data sets EVERY DAY
Provides SWIFT 15022 and 20022 (Funds) Processing for over 40% of all SWIFT messages worldwide
Can interact natively with Legacy and Service Oriented Systems
Extremely efficient processing lowers infrastructure costs and provides high throughput and scalability
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How to Get Started
IBM QuickStart for WebSphere Transformation Extender
Transforming your payment processing to meet Single Euro Payment Area (SEPA) standards
Our experts help you quickly define your transformation requirements and help you begin to develop your mapping specifications.
We lead an architectural assessment of your middleware to evaluate the requirements across your system topology.
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Further information
WebSphere Transformation ExtenderVisit www.ibm.com/software/integration/wtx
WebSphere Process ServerVisit www.ibm.com/software/integration/wps
WBI for Financial Networkshttp://www.ibm.com/software/integration/wbifn/
IBM Financial Services Solutionshttp://www.ibm.com/industries/financialservices/index.jsp
Single Euro Payments Area (SEPA)visit http://www.europeanpaymentscouncil.eu