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Open Forum on Pan-European Instant Payments, 9th May 2017
Open Forum on Pan-European Instant Payments
Frankfurt9th May 2017
Open Forum on Pan-European Instant Payments, 9th May 2017
Welcome and introduction
Wolfgang EhrmannChairmanEuro Banking Association
Open Forum on Pan-European Instant Payments, 9th May 2017
TARGET instant payment settlement (TIPS) initiative
Karen BirkelMarket Infrastructure DevelopmentEuropean Central Bank
Rubric
www.ecb.europa.eu ©
Table of content
123
Instant payments: what does the market need?Time plan
TIPS explained: service and participation
Rubric
www.ecb.europa.eu ©
TARGET instant payment settlement (TIPS)
Promote efficiency and ensure market integrationin the settlement of instant payments
Extend the availability ofCentral Bank Moneysettlement to 24/7/365 tofacilitate the emergence ofinstant payments
TIPS explained
Rubric
www.ecb.europa.eu ©
Principles: foundation of the service
Instant payments settlement in
Central Bank Money
Same participation criteria as for
TARGET2
24/7/365operating hours
Operated on full cost recovery
Multi-currencytechnical capability
Support compliance with SCT Inst scheme
TIPS explained
Rubric
www.ecb.europa.eu ©
Additional principles
• Technical solution for instant payment settlement services
• Offers final and irrevocable settlement
• Participation in TIPS is not mandatory
• Developed and operated by the Eurosystem
• Lean, harmonised and standardised
pan-European service
TIPS explained
Rubric
www.ecb.europa.eu ©
Integrated TARGET services
TIPS explained
Rubric
www.ecb.europa.eu ©
Actors in TIPSSame participation rules applied in TARGET2
(i.e. eligibility for accessing Central Bank Money)
ReachableParty
InstructingParty
TIPS explained
Contractual Agreement
Settle instant payments on a participant’s TIPS account
Hold one or many TIPS accounts to transmit/ receive instant payments
Instruct on behalf of the Participant or the Reachable Party
Participant
ReachableParty
InstructingParty
Rubric
www.ecb.europa.eu ©
Connect to TIPS• TIPS will be a network vendor agnostic service
• Participants can decide which network vendor they intend to use as long as this network vendor adheres to the requirements
TARGET instant payment settlement
Vendor 1 Vendor 2 Vendor 3
TIPS explained
Rubric
www.ecb.europa.eu ©
Table of content
123
Instant payments: what does the market need?Time plan
TIPS explained: service and participation
Rubric
www.ecb.europa.eu ©
TIPS – assessing the market needs
Review of the User Requirements Document for TIPS after feedback from the market (public consultation closed 24/02/2017)
“TIPS on Tour” to present the service to European market representatives in an interactive way
What does the market need?
Rubric
www.ecb.europa.eu ©
Market consultation on User Requirements
Good reaction to the service, in particular:
• Model of settlement in CeBM
• Network connectivity• Pricing
60 Responses from European financial institutions and infrastructures
Points that have been clarified:• Interoperability with instant clearing
infrastructures• Pan-European reachability within
TIPS• Potential role of Automated Clearing
Houses (ACHs) in TIPS • Liquidity management implications
Publication of: “Explanatory note on the co-existence of TIPS with other instant payment services"
What does the market need?
Rubric
www.ecb.europa.eu ©
Market consultation on volume expectations
1. Estimated overall % volumesof instant payments:
2. % instant payments expectedto be processed in TIPS:
• 12% of total payments by 2020• 22% of total payments by 2023
• 20% expects to process 100%• 66% expect to process some,
but not able to estimate• 14% expect to process none
72 Responses from European financial institutions and infrastructures(representing more than 1475 institutions from 24 countries)
What does the market need?
Rubric
www.ecb.europa.eu ©
Resulting pricing policy
No entry fees
No fixed fees
No account management/ information fees
Price per instruction (to de defined)
Full cost recovery
Reachability Simplicity
Principles
What does the market need?
Rubric
www.ecb.europa.eu ©
Table of content
123
Instant payments: what does the market need?Time plan
TIPS explained: service and participation
Rubric
www.ecb.europa.eu ©
TIPS
Time plan2016 2017 2018Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
• May – June ’18Start of Eurosystem internal system testing
• August – September ’18Start of pilot testing involving users
• November ’18TIPS Go-live
Realisation phase
Investigation phase
Time plan
January ’17Submission of first draft User Requirements Document (URD)
January – February ’177 weeks of Market consultation on the URD
• June ’17Decision to develop the service
Rubric
www.ecb.europa.eu ©
Thank you for the attention!
www.ecb.europa.eu/paymECB: market infrastructure and payments
@T2SECB
Open Forum on Pan-European Instant Payments, 9th May 2017
EBA CLEARING’s instant payment A sneak preview
Erwin KulkEBA CLEARINGHead of Service Development & Management
20Instant Payments overview Q2 2017 © EBA CLEARING – proprietary to EBA CLEARING
Confidential
Instant Payments – a community approach
• In December 2014, the ERPB issued a statement including a definition ofinstant payments and a call to the supply side of the industry to develop atleast one pan-European instant payment solution
• In 2015, in co-operation with interested users, an instant payment initiativewas launched to explore the requirements for next generation infrastructuresafter SEPA migration
2014 20162015• Launch of IP Task
Force• Blueprint for a
pan-European IP Infrastructure Solution
• RFP for technical solution provider
• Real time becomes a global trend
• ERPB statement for instant payments for euro
• Conclusion on preferred supplier
• Successful underwriting phase
• Project kick-off• Publication of
system specifications
21Instant Payments overview Q2 2017 © EBA CLEARING – proprietary to EBA CLEARING
Confidential
Community of funding banks
• Central Bank of Savings Banks Finland
• Commerzbank• Crédit Agricole• Danske Bank• Deutsche Bank• DNB• Elavon• ERSTE Group Bank• HELABA• HSBC• HVB – UniCredit• ING• Intesa Sanpaolo
• ABN AMRO Bank• Aktia• Allied Irish Banks• Banca ITB• Banca Monte dei Paschi
di Siena• Banca Popolare di Milano• Banca Sella• Banco de Sabadell• Banco Popular Español• Bank of Ireland• Bank of New York Mellon• BBVA• Caixa Bank
• J.P. Morgan• KBC• LHV Pank• Nordea• OP Corporate Bank• Raiffeisenlandesban
k Oberösterreich• Santander• S-Bank• SEB• Société Générale• Swedbank• Ulster Bank• UniCredit S.p.A.
a large group of additional banks have already indicated to plan to become a user of the service during 2017 or 2018
22Instant Payments overview Q2 2017 © EBA CLEARING – proprietary to EBA CLEARING
Confidential
Project Progress
FinishedStatus
On-going / on track
Not started
23Instant Payments overview Q2 2017 © EBA CLEARING – proprietary to EBA CLEARING
ReachFrontrunner PSP - Participation map
23
PSPs from 20 European countries have indicated that they are intending to participate in the EBA CLEARING’s IP service as from November 2017 or at a joining date in 2018
Many of those PSPs are active in several countries where they are planning to roll out the service (expected reach)
>5
3-5
1-2
Expected Reach
24Instant Payments overview Q2 2017 © EBA CLEARING – proprietary to EBA CLEARING
Confidential
IPS Participation Dashboard
• A constant growth of interest in the instant payment service by PSPs and TSPs
• 33 Frontrunner Technical Service Providers have signed an NDA and indicated that they intend to provide participants in the instant payment service with related services and support in connecting to the system
• Next to the 39 funding banks, 70 other PSPs have shown interest in being an early joiner of the service
25Instant Payments overview Q2 2017 © EBA CLEARING – proprietary to EBA CLEARING
Confidential
Update on testing preparations
• 27 Frontrunner PSPs indicated they plan to test and join in 2017
• 25 Frontrunner PSPs indicated they plan to test and join in H1 or H2 2018
26Instant Payments overview Q2 2017 © EBA CLEARING – proprietary to EBA CLEARING
Confidential
• Pan-European by design and desire: fully user-driven approach
• Based on 15 years of experience in developing and operating pan-Europeanretail payment infrastructures
• Leveraging on SEPA investments to date
• Ensuring full SCT Inst Scheme compliance, as well as communities' needsto exceed it at any time
• Substantial domestic market share in communities planning to go live in thecoming year (FI, IT, DE, IE, AT, Baltics, SK)
• Fully pre-funded, ensuring certainty of settlement under the SFD
• Single point of entry for multiple communities
• Diversity of options for AS-PSPs to connect to RT1
Unique Selling Points of EBA CLEARING’s RT1
www.ebaclearing.eu
EBA CLEARING40 rue de Courcelles, F-75008 ParisTel. +33 1 53 67 07 00
Open Forum on Pan-European Instant Payments, 9th May 2017
Instant Payments Programmein SPAIN
Pilar Claveria GarciaSpanish Banking AssociationPayments and Operations Advisor
Asociación Española de BancaAsociación Española de Banca
BACKGROUND
• The initiative is an industry-wide effort, with participation ofthe entire banking community and processors in Spain.
• Following the EU recommendations, in July 2015 the Bank ofSpain, in its role as facilitator, promoted the implementation ofan Instant Payment Solution in Spain.
• The implementation project was kicked-off in September2015 and the goal is to have the service fully implementedby July 2017.
Asociación Española de Banca
9 MONTHS
Quick time to market solution for PI for the P2P, C2R & C2eR use casesFINAL: business model, customer experience, brand and value added servicesTRANSITORY: Processing & settlement
9 MONTHS
DirectoryFraud scoringDisputes resolution
Progressive launch : - P2P APP/WALLET mobile-mobile- P2eR APP/WALLET/HB internet / mobile- P2R APP/WALLET mobile- TPV
ISO 8583 + ISO 20022
Business caseCustomer experienceBrand
Settlement equivalent to cards model
CONFIDENTIAL
PI Programme
UX
OP.FIN.
CUSTOMER
CHANNEL
VALUE ADDED SERVICES
PROCESSING
SETTLEMENT
Asociación Española de Banca
Programme PI24 MONTHS
Customer not involved in the migration from transitory to final solution.CHANGES: processing & settlement
UX
OP.FIN.
ISO 20022
SNCE – ASI 6 RT
24 MONTHS
NOCHANGES
CONFIDENTIAL
DirectoryFraud scoringDisputes resolution
Progressive launch : - P2P APP/WALLET mobile-mobile- P2eR APP/WALLET/HB internet / mobile- P2R APP/WALLET mobile- TPV
Business caseCustomer experienceBrand
CUSTOMER
CHANNEL
VALUE ADDED SERVICES
PROCESSING
SETTLEMENT
Asociación Española de BancaAsociación Española de Banca
KEY GUIDING PRINCIPLES• The underlying product for the instant payments solution would be SEPA Credit Transfer
(SCT Inst), so payments to be done from IBAN to IBAN
• The programme was defined in two layers of services, each with its own rulebook:
• Basic Service (BS): managed by the Spanish ACH, fully compliant with SCT Inst,and neutral to any end-user solution that might be developed in the market
• Value-Added Services (VAS): leveraging the BS, the VAS will facilitate theapplication of instant payments to different commercial use cases (P2P, P2R) withouta need to recourse to the beneficiary’s IBAN (i.e., using an alias, proxy database)
• The BS is neutral so third parties (e.g. PSPs) can link to it to provide value added servicesindependent of our programme
• The VAS will operate under a common brand and are integrated within each banks’channel offering, as there is no specific “app” for the programme
• The alias for the VAS is the mobile phone number. One IBAN can be linked to multiplemobile numbers, but each mobile number can only be linked to one IBAN
• Both layers of the Spanish programme will be interoperable with other programmes to belaunched in the EU
Asociación Española de Banca
P2P RULEBOOKCOMMON
BRAND FOR VALUE ADDED
SERVICES
SINGLE DIRECTORY
(mobile/email - IBAN)
Spain’s Instant Payments Programme Layers
VALUE ADDED INFORMATION SERVICES(COLLABORATIVE)
CHANNEL(COMPETITIVE) …
CUSTOMERS
Peer to Peer Payments
Payments at street merchants
Online Shopping
P2R RULEBOOK
Instant credit transfer (SCT Inst)BASIC SERVICE
A B C D
Asociación Española de Banca
• The BS (SCT Inst) basic service to be processed by Iberpay via a new module within the ACH.
• End-to-end transfer of funds with an approximate execution time of 1,5”.
• Availability 24 hours, 7 days a week with real-time interbank clearing.
• Risk mitigation measures in place (maximum amount per transaction, limits to the net debitpositions, etc.).
• Both the PSP of the payee and the PSP of the payer will receive a notification once funds havebeen cleared, credited and fully available to the beneficiary.
• Settlement supported by ASI 6 RT.
• Pan-European interoperability and reachability to be ensured similar to what is currently in placefor SCT and SDD.
• Transitional solution (to be discontinued once migrated to SCT Inst), with same end-userinterfaces and the same user experience to allow payments end-to-end from one account to anotherwithin a few seconds.
Basic Service Main Features
Asociación Española de Banca
Value Added Services - Use Cases
A.- Payment between peers (P2P push)
George logs into his bank‘s app
1
He selects his friend from his contacts agenda, includes amount and concept
2 The money is transferred in seconds
3
B.- Request for payment between peers (P2P pull)
George logs into his bank‘s app
1He selects his friend from his contacts agenda, includes amount and concept
2 Alex receives the request and accepts it
3 The money is transferred in seconds
4
C.- Payment at a physical merchant (P2R)
She puts her mobile next to the NFC POS terminal...
The merchant loads the transaction information in the POS terminal
Martha logs into his bank‘s app
1
2
3 4 ... and the payment is made in seconds
D.- e-commerce payment (P2eR)
At an e-commerce site, Anne chooses to pay with our service
1Automatically she is redirected to her bank‘s website, where she logs in as usual
2
Checks the transaction information and confirms it
3The payment is made in seconds
4
P2P
P2RSI
NG
LE B
RA
ND
+ P
RO
XY
Asociación Española de Banca
P2P Payments
EXAMPLE
A
B
D
B
C
E-Commerce payment
Payment at street merchant
BIZUM
Directory (Mobile/Email – IBAN)
D
Competitive Channel
Value Added Services User Experience
BIZUMBANCO A C
CONFIDENTIAL
Directory (Mobile/Email –IBAN)
Asociación Española de Banca
• Each bank enrols its own customers in the programme
• Enrolments are via opt-in by the client (no mass enrolments possible)
• Banks will execute their own enrolment campaigns, in addition toprogramme wide marketing campaigns
• Enrolment to be mostly done via the online banking sites or apps ofeach entity
• Customers will be able to opt-out of the programme at any time via thebanks’ customer service channels
Value Added Services Enrollment Strategy
CONFIDENTIAL
Asociación Española de Banca
• The programme (both layers) will be able to interoperate with other similarprogrammes launched in the EU.
• Directory interoperability for VAS:
The Spanish Instant Payments Programme is part of the SteeringCommittee of the EPC-sponsored Mobile P2P Payments InteroperabilityForum.
We are also part of the Berlin Group’s NextGen initiative on P2Pinteroperability.
• Basic Service (SCT Inst) interoperability:
• The programme is evaluating the most effective interoperability model forthe BS in Spain among several alternatives.
International Interoperability
CONFIDENTIAL
Asociación Española de Banca
• Program implementation Kick-off.
• Technical launch for Value Added Services (+ ISO8583 – financial transaction) and interim solution forBasic Service.
• Launch of VAS to the general public (with interimsolution for BS).
• Full launch of Basic Service, permanent solution(SCT Inst- ISO 20022).
High-level Timeline
Sep ‘15
Mai ‘16
Oct ‘16
Jui ‘17
CONFIDENTIAL
Asociación Española de Banca
COMPLET
UNIVERSAL
INSTANT
SECURE
o Simple and convenient
o Irrevocable
o Digital/mobile
SOLID
QUICK/ AGILE (≈2 sec )
RELIABLE
INSTANT AVAILABILITY OF FUNDS
o Electronic receipt
o Easy management/ reconciliation
o Limited setting up
CONSUMERS RETAILERS
Purchase factors
Differential facteurs compared to other means of payments
BIZUM goal is to become a market standard
CONFIDENTIAL
Asociación Española de Banca
27 Banking brands offer Bizum today,
95% of the banking market share
more entities to join
Soon available in …Bizum available in:
Where are we?
Asociación Española de Banca
BIZUM’S GOAL IS TO BECOME A PAYMENTS INTEGRAL SERVICE THAT COVERSMULTIPLE PAYMENT USE CASES
BETWEEN INDIVIDUALS
NEW USE CASES
RETAILERS
3rd PARTIES INTEGRATION
Money pushMoney pullReturnsMultiple operationsAdditional message attached to the payment operation (text and/or picture)
Donations to NGOsMarketing: prizes, companies’ discounts to individuals
E-commerce purchaseStore in-APP purchaseIn-store purchase (starting “without physical
POS”)
Social Networks3rd parties applications (e.g. expenses split)Stores
Currently available for users
Asociación Española de Banca
RESULTS OBTAINED SINCE THE COMMERCIAL LAUNCH AND GOALS IN THESHORT AND MEDIUM TERM
475,000USERS
790,000TRANSACTIONS
40.5MAMOUNT
TRANSFERRED
Goals for 2017…
>1M USERS500K USERS
since OCTOBER 3rd 2016…
MAY DEC
Asociación Española de BancaAsociación Española de Banca
Thanks for your attention!
Open Forum on Pan-European Instant Payments, 9th May 2017
Instant payments initiative: STET State of the development
José M. BeltránSTETDirector Business Development
46
Topics
• Introduction to STET and where we are with the IPs initiative
• The delivery of SCTinst is transforming the role of CSMs
• Traditional CSMs’ architectures may not stand the IP test
• Pull / Push payment – Alternative to a Card payment – Convergence
• High Value – Low Value - Convergence
• New settlement models for SCTinst
• Risk profiles changed and need to be addressed
• Cyber risk to the forefront – No time to think
• SEPA reach needs to be built – Interconnectivity - Competition /Cooperation
47
STET Overview
Our activity and track record
Critical
Leader
Diversified• We support the full range of payments
services: Direct Debits, Credit Transfers, Cards and ATMs transactions, Cheques, Bills of Exchange, and soon Instant Payments
• We also provide a secure network
• STET is one of the leading payments processors combining
• Card authorization at POS & ATM
• Clearing & settlement services
• STET is a critical operator for our clients,the banks and the banking communities weserve every day
• Systemically Important Payment System(SIPS)
22.3Billion transactions in 2016
52%Of euro transactions cleared in CSMs
55%17%16%12%
Cards & ATM
Transfers
Debits
Cheques
Mix of payment instruments processed by CORE system
48
STET has a unique expertise on payments and cards gained in one of the largest markets in Europe
Today Tomorrow
• STET is a reliable partner for European payments in authorization and Clearing & Settlement with historical expertise
European Scope
• We are continuously innovating to design new functional and technical solutions for our clients, to respond to tomorrow’s challenges :
– Instant payment
– Mobile payment
New services
Development Agility
• STET processes > 90% of French authorizations and Clearing & Settlement
• STET processes > 90% of Belgium Clearing & Settlement
>90%
Our network:
Our clients:French banks
Belgium banks through
49
STET has proven top performances on its core services bringing competitive advantage for its clients & partners
Robust & efficient operational model
• Benchmarked for 300,000,000 transactions per day
• 5.4+ bn SDD & SCT transactions cleared in 2016
Top Performances
Full Compliance
Structural Advantages
Clearing Services Cards Services• 2,000+ transactions per second• Avg response time: 0.02s / msg• Uncompleted transaction: <1 in
one million• Annual infrastructure availability
over 99.999%
• Service Level Management ensures that STET service meets service level objectives and key performance indicators
• STET is positioned with a competitive pricing based on its high processing volumes
• STET offers Euro CSM Real Time Clearing
• STET solutions provide flexibility in design (SOA)
SIPS certified by ECB
50
STET provides efficient solutions to the banking industry
Flexible & evolving
We lead the wave of change to providenew services to our paymentscommunity in support of their evolvingbusiness requirements.
Integrated solution
We provide PSPs across SEPA an integrated solution for Clearing & Settlement for all payment instruments through a Single Access
Secure & efficient
We ensure the secure and efficient exchange of transactions between the participants in our system
Clearing services strengths
Clearing solution diagram
Reducing costs
This approach allows PSPs to significantly reduce internal operational costs in relation to participating in multiple systems for the different payment instruments
51
Our ambition, a pan-European partner for payments and cards, delivering innovation and excellence
STET service model
SEPA & non-SEPA payment Instant payment Mobile payment
Clearing & Settlement
Card Authorization
Security & Fraud scoring
Tokenization &Proxy Database
52
EPC SCTinst Scheme
Impact on PSPs - a challenge
To support Instant Payments a PSP needs to : Have high availability of services: 99.999% Highly resilient : Multiple datacentres in Active/Active mode Highly performant Messaging and Processing : Milliseconds Be able to manage customer initiation and accounting real time : 2 seconds max Be able to accept transactions and make funds available in : 2 seconds max
Instant Payments means reengineering PSPs’ back office processes The short time window puts further pressure on risk mitigation for both sender
and receiver Know your client (KYC)
Traditional correspondent banking relationships – Indirect Participants Impact of PSD2 TPP initiation
Detecting Fraudulent transactions AML and Sanctions screening Probably cautious
roll-out Probably cautious
roll-out
53
Impact on Clearing Systems – a challenge
Instant Payments are not just Payments going faster To support Instant Payments a clearing system needs to deliver:
High availability : 99.999% - 24/7/365 Highly resilient : Multiple datacentres in Active/Active mode Highly performant Messaging and Processing : Milliseconds Providing connectivity and Network – SWIFT not present Instant Clearing and Settlement : Providing instant payments finality Real Time information services Interoperability with other clearing systems : provide instant wide reach
Existing batch clearing systems are not fit for purpose Card switching systems lack real time clearing & settlement
New Clearing & Settlement systems are required for Instant Payments New Clearing & Settlement systems are required for Instant Payments
54
55
Technical Infrastructure – Hybrid infrastructureConvergence of Card and Clearing
STET Box STET Box
Flow Manager Treasurer
BackOffice BackOffice
Financial Monitoring
Flow Monitoring
Manage Guaranty
ManageSettlement
Instant Payment Liquidity Management, T2 Interface , Audit & Reporting
Alerting
Provide Aggregated Position
Store Msg& full history
Ensure Instant
Irrevocability
Acquire,Control,Route
Acquire & Route
Confirmation
Instant Payment Real‐ Time MessagingParticipant A Participant B
Send SCTinstSend SCTinst Route SCTinstRoute SCTinst
Synchronise Synchronise
Instant Irrevocability
& Finality
Instant Irrevocability
& Finality
Acquiring SecurityControls
Acquiring SecurityControls
RouteConfirmation
RouteConfirmation
Store Msg. & Full history
Store Msg. & Full history
Position Management
Position Management
Treasury Tools
Treasury Tools
Manage Liquidity Manage Liquidity
ASI6 Real Time Module & PSP Payment Accounts ASI6 Real Time Module & PSP Payment Accounts
FlowMonitoring
FlowMonitoring Alerting Alerting Financial
Monitoring Financial
Monitoring
Technical Infrastructure & Connectivity
Active /Active infrastructure – 99.9999% availability – 24/7/365 STET connectivity – STETNet – STETBox
56
57
Managing EPC Scheme v AOSs
STET IP CSM is a Single CSM supporting individual PSP participation and PSPs organised within a community (example France, Belgium, others)
The basic service will be fully compliant with EPC SCTinst Scheme In addition a PSP can define/ join a Closed User Group within the CSM The CUG can be at community level or bilateral agreement between two or more
PSPs The CUG flexibility allows STET to deliver variants to the scheme requested by
PSPs operating within a single CSM For example variants such as Higher maximum amount, shorter timeouts plus other
requirements that may emerge over time This approach will also be cost efficient and reduce time to market for future changes
Every enrolled participant will be able to reach all others participants even if all or some of them belong to a different community or other CSM (via the underlying EPC compliant service)
Community CCommunity BCommunity A
STETInstant Payment User Area
STETInstant Payment User Area
AA AB AC BD BE BF CG CH CI
IP CUG A IP CUG B IP CUG C
IP CUG : Instant Payment Closed User Group
Governance EPC scheme v AOSs
Community Based Governance Specific Functional & Technical Reqs.Managed through Community CUGs
STET SCT IP CSM Direct ParticipantsEqual representation
Functional & Technical Reqs.
STET SCTinst ServiceCSM Common Layer
SCTinst
Scheme
French Community
BelgianCommunity
Community/ Banks
X, Y Community
EPC RB & IG ECB Risk Mitigation & Settlement
EC Regulation
58
Orchestrating the message flow
Creates and sends SCT Inst.
Validates SCT Inst instruction
Adjusts O PSP payment capacity and
reserves funds
Routes SCT Inst instruction
Validates SCT Inst instruction
Credits Beneficiary(makes funds available)
Adjusts B PSP payment capacity with reserved
amount
Send immediately delivery report
Confirms payment
STET IP CSM B PSPO PSP
Initiate IP
Payment confirmed
Funds available and credit confirmed
Originator Beneficiary
Creates and sends confirmation message
Send confirmation message
pacs.008
pacs.008
pacs.002
pacs.002
Validates if it can credit beneficiary
pacs.002
1 second SLA for all CSM actions 1 second SLA for all CSM actions
59
SCTinst Project in Europe
The Eurosystem has worked with the CSM community to ensure interoperability between the CSMs that will offer SCTinst Clearing & Settlement Single procedure for Settlement : TARGET2 ASI6 Real Time Single model for Risk Mitigation : PSPs Pre-Fund CSM Technical Account in TARGET2 Common Access policy from the CSMs : No barriers to interoperability
Finality is achieved in the CSM supported by Central Bank Moneyheld in the CSM Technical Account
(Owned by the NCB and operated by the CSM)
Finality is achieved in the CSM supported by Central Bank Moneyheld in the CSM Technical Account
(Owned by the NCB and operated by the CSM)
Funding / Defunding
Individual Instant Payment Instructions
60
Indirect Participant(IPDTA)
Direct Participant
TARGET2 STET IP CSM
Direct. Part PM
CEC IPTech Account
Direct Part.Position Account
SbTransfertInitiationX+Y
AsTransfertNoticeX+Y
X + Y
X + YCreditTransferY1
2
3
X + Y
• The pre-funded amount is calculated by each Direct Participant according to its projected requirement for Instant Payment. • The amount calculated by the Direct Participant takes also into account the activity of its Indirect Participants. Directs
participants must first agree with its direct participants on the amount allocated • The pre-funded amount is transferred by the Direct Participant to a IP Dedicated Technical Account operated by STET in
Target2 ASI6 Real Time module.
ASI6 RT
Liquidity Management
X = IP amount for DP Y = IP amount for Ind. Part
61
SbTransfertInitiationX+Y
Liquidity management tools
Payment capacity
Pre-funded amount in T2
Payment
Liquidity
Minimum threshold
No LiquidityIP Service blocked on the sending side Participant can still receive IPs.
Pre-funding amount
Alert is broadcasted in IP CSM Workstation
Time
Maximum threshold
1 2 43
Top upTop up
Liquidity release
Liquidity release
Minimum and Maximum threshold Alerts, Liquidity Management between DP/IPDTA/Group positions, Liquidity requirement forecast, Automated liquidity management
62
New GUI & A2A interfaces
Selection Criteria
Liquidity Dashboard
Consolidated View
Start Balance
50,000,000.00
Debit
- 16,855,256.12
Credit
8,566,112.89
Current Balance
41,710,856.77
Pending Transactions
800,000.00
Projected Liquidity
42,510,856.77
High position Low position
54,985,212.54
15,565,855.12
16:30
18:15
Position accounts Columns
Home > Liquidity Management > Liquidity Dashboard
Excel Export
<< < 1 2 3 4 … 10 > >>
/ Instant Payment REF
Id Participant BIC Participant Nam e Type CORE Account Start balance Debits Credits Current balance Low Lim it High Lim it IP Service Status
1 CDNAFRPP Crédit du Nord DP CN12345 15,000.00 5,000.00 10,000.00 20,000.00
2 AAIPFRPP Banque AA IPDTA AA12345 15,000.00 5,000.00 10,000.00 20,000.00
3 BBIPFRPP Banque BB IPDTA BB12345 2,000.00 12,000.00 10,000.00 00.00
4 CCIPFRPP Banque CC IPDTA CC12345 15,000.00 5,000.00 10,000.00 20,000.00
FLOW MANAGEMENT
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63
Implementation Plan
Project launched Oct 15
Service design signed off Sept 16
Participant Functional & Technical WS From Sept 16
Draft Specifications published Nov 16
Functional & Technical Specs frozen April 17
Set up of VPN & Sboxes March 17
New Infrastructure & Data Centres March 17
System Delivery to Test Environment July 17
Participant Connectivity & Testing Sept 17
Live Operation Nov 17
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Reduced CSM landscape
• Seven CSMs have disclosed intention to operate a SCTinst compliant CSM
• In order to ensure SEPA reach the ECB has been working on a proposal for TARGET2 Instant Payments Service – TIPS
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Interoperability Scenario
Single Access STET IP CSMSTET IP CSM
equensWorldline IP CSM
equensWorldline IP CSM
IberpayIP CSM IberpayIP CSM
Bilateral Interoperability
Links
STET Technical Facilitator in EBA Cl
STET Instructing Party in TIPS
STET Participants
?
“it shall be enough for a PSP to participate in one infrastructure only to be reachable at pan-European level” ECB
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European ACH Association (EACHA) has published the SCTinst
Interoperability Framework for CSMs (EIPIF) Framework including Settlement, Technical messaging standards, Administration messages, Reach table standards and Reconciliation
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Centralisation of services in CSMs
The CSM becomes the trusted partner for other non-competitive services
Proxy Database P2P IBAN look up Proxy Database
P2P IBAN look up
AML & Sanctions Screening
AML & Sanctions Screening
Data Analytics Data Analytics Fraud Scoring Fraud Scoring
White/Black Lists checks
White/Black Lists checks
E- Invoicing E- Invoicing
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Thank you for your attention
Open Forum on Pan-European Instant Payments, 9th May 2017
National initiatives – The Dutch Perspective
Inge van DijkBetaalvereniging NederlandProgram Manager Instant Payments
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Dutch Instant Payments to be developed within 4 years : Live as of 1 May 2019.
70Instant Payments | © 2016 Dutch Payments Association
Paying and receiving money within 5 seconds…
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…by all types of customers without limits on transaction amount…
71Instant Payments | © 2016 Dutch Payments AssociationInstant Payments | © 2016 Dutch Payments Association
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…during all hours regardless of market segment….
72Instant Payments | © 2016 Dutch Payments Association
Dutch banks believe that Instant Payments
will become ‘the new normal’
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ECB’s layered approach followed to scope and structure infrastructure requirements
Scope NL program:
an E2E workinginfrastructuresafeguarding EU interoperability
Scope ECB
EPC RulebookSCT Inst
Instant Payments | © 2016 Dutch Payments Association
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Dutch positionsInfrastructure must cater for the future: all payment types
• Device independent & market segment independent -> no value limit• Supporting Pull and Push • Always 5s (SLA) but some transfers, in case of incidents, are less urgent • Dutch (Bank) Switching Service redesigned (in lign with SDD)• Bulk payments not foreseen at Go Live date, possibly later• Continuity and uptime are crucial, ambition for Instant Payments to meet
customers’ expectations (and ready for Dutch law on‘Critical Payments’)
Instant Payments | © 2016 Dutch Payments Association
|
Dutch positionsInfrastructure must cater for the future: all payment types
• Device independent & market segment independent -> no value limit• Supporting Pull and Push • Always 5s (SLA) but some transfers, in case of incidents, are less urgent • Dutch (Bank) Switching Service redesigned (in lign with SDD)• Bulk payments not foreseen at Go Live date, possibly later• Continuity and uptime are crucial, ambition for Instant Payments to meet
customers’ expectations (and ready for Dutch law on‘Critical Payments’)
Remaining issues / attention points:• Securing interoperability & pan-EU reach: -> risk of market fragmentation• Additional fraud prevention measures required, aimed at preventing cash out
Instant Payments | © 2016 Dutch Payments Association
|
What products can be supported on the Instant Payments infrastructure?
Single transactions through mobile and
internet channel
New products, channels and/or
providers
Other singletransactions
Bulkpayments
Time
Volu
me
Commercialgo-live
Instant Payments | © 2016 Dutch Payments Association
Dutch commitment, rest up to the market
|
Dutch Programma well on track forupcoming milestones
Instant Payments | © 2016 Dutch Payments Association
Testing
From 1 March 2018
• Infrastructure is ready for end-to-end testing
• Scope is:• inter-CSM (1/3/18) • inter-PSP (1/7/18)
1 January 2019
• Single payments• Mobile and Internet
payments• Defined target audience
Pilot
1 May 2019
• Start roll-out• Communication moment• PSP determines own
services and pace of implementation
Go-live
Roll-out
1 July 1 January 1 May
2018 2019
1 March
|Instant Payments | © 2016 Dutch Payments Association 78With IP and PSD2 the Payments Landscape will change for good!
Open Forum on Pan-European Instant Payments, 9th May 2017
Coffee break & networking
Open Forum on Pan-European Instant Payments, 9th May 2017
A highway to the new normal
Giancarlo EspositoService Solutions Intesa SanpaoloCorporate & Investment Banking Division–Global Transaction Banking
AGENDA2 Key success factors and main challenges
3 Customer onboarding
4 Reachability and interoperability
5 Use cases and channels
8 Where we are
9 Q&A
Key success factors & main challengesOverview
Infrastrutture
Interoperability Business models & targetsCustomer Onboarding
Intra bank Inter bank Inter ACHs
Easy and fast accessfor every customerwithout barriers or hurdles
War on cash and checks
New direct and indirectrevenues
24/7/365 system and infrastructureavailability
INSTANT PAYMENT AS THE NEW NORMAL
Real time processing AML & fraud detection
Product integration
Already talking about«faster instant»
SCT Inst to be integrated with existingproduct as well as new product that regulatorscenario introduces
Control and monitorininfrastructures as to evolve in instantparadigm (ok/ko)
Key Success Factors
Challenges
Customer onboardingFrictionless and massive
Minimize contractual effortsThe less is the effort the customer requires to join and the greater the
likelihood of using the service
Massive adoptionTo became mainstream, Instant Payment solution must reach almost every
customer
RevenuesPossibility to identify new
revenue streams
Avoid substitution effectThe service must be designed an add-on to maintain profitability
New products and VAS Alongside the core product, insert value-added products that can generate new transactions
Maximize use casesThe higher the number of clients can be reached with minimum effort, the higher is the number of use cases enabled
Reachability and interoperabilityFrom a niche service to a mainstream service
Full bank customer reachability
Reachability within ACH, even trough bilateral agreements
ACH interoperability
Native activation of all current accounts, regardless of legal form, merchandise sector, type of products activated
The greater is the native ACH reachability the smaller is the need of ACH agreements for interoperability
Full reachability and interoperability between the adherent ACHs, perfectly transparent for the end customer
P2P P2B
B2PB2B
Market targetsAnd potential relevance
Person to Business• e/m commerce
• Remote/in store convergence
• POS – alternative to existing payments
Business to Business• Bill payments
• High amount transfers
• Cash pooling
Person to Person• e/m-payment
• Used goods trade
Business to person• Salary & pensions
• 24/7/365 availability
• Refunds
• Consumer credit
Target relevance
Use casesWPR survey
Salaries & pensions
Seamless payments
Consumer credit
High value purchases
What and whereUse cases and ISP channesl
Push payments
Cash pooling
Immediate refunds
Cash on delivery
Direct channels
Dedicated interfaces
3rd parties
H2H
Incoming
First testing resultsIntesa Sanpaolo and EBA Clearing Joint Press Release
Thank you!
Open Forum on Pan-European Instant Payments, 9th May 2017
Questions & Answers
Hansjörg NymphiusAdvisor to the BoardEuro Banking Association
Open Forum on Pan-European Instant Payments, 9th May 2017
Approching the home stretch: How close are the banks to the finishing line?Moderator:Hansjörg Nymphius, Advisor to the Board, Euro Banking Association
Panellists:Jannick Versluijs, KBCNiklas Lemberg, Nordea FinlandGiancarlo Esposito, Intesa SanpaoloCorinna Lauer HypoVereinsbank (Unicredit)
Open Forum on Pan-European Instant Payments, 9th May 2017
Closing remarks
Hansjörg NymphiusAdvisor to the BoardEuro Banking Association
Open Forum on Pan-European Instant Payments, 9th May 2017
For any comments or questions, please contact us at [email protected]