Open Forum on Pan-European Instant Payments

Transcription

1 Open Forum on Pan-European Instant Payments Kick-off meeting Helaba, Frankfurt

2 Welcome and introduction Wolfgang Ehrmann Chairman Euro Banking Association

3 ECB / ERPB definition, vision and way forward Gilbert Lichter Secretary General Euro Banking Association

4 ECB / ERPB definition, vision and way forward Contents 1. Pan-European instant payments in euro: definition, vision and way forward submitted to the ERPB by the ECB (ERPB/2014/017) 2. Statement by the Euro Retail Payments Board (ERPB/2014/018) 4

5 ECB / ERPB definition, vision and way forward Definition Instant payments are hence defined as electronic retail payment solutions available 24/7/365 and resulting in the immediate or close to immediate interbank clearing of the transaction and crediting of the payee s account (within seconds of payment initiation), irrespective of the underlying payment instrument used (credit transfer, direct debit or payment card) and of the underlying clearing and settlement arrangements that make this possible.* * Footnote : Solutions like MyBank, Ideal, Sofort and similar ones are not seen as instant payment solutions according to the definition in this note, as they imply use of online banking applications, but do not offer immediate clearing and crediting of the payee s account, with concomitant availability to the payee of the funds credited. 5

6 ECB / ERPB definition, vision and way forward Vision The expectation is that (at least) one pan-european euro instant payment solution should become available to end-users in the short term, consisting of a common scheme cooperatively developed on the market or of multiple (ideally interoperable) schemes competitively developed on the market, and mainly based on credit transfers. The interface would preferably be multichannel. The actual technical aspects of instant payment solutions should be left to the industry, under the assumption that 24/7/365 availability, immediate or close to immediate crediting of the payee s account, Europe-wide reach and interoperability should be ensured. 6

7 ECB / ERPB definition, vision and way forward a European market for instant payments characterised by fragmentation and competing, non-interoperable solutions will be suboptimal and would require a harmonisation and integration effort soon. This calls for action from the supply side of the market. As retail payments are a network industry, a reinforced cooperative approach - between incumbent and new PSPs - would help achieve an open and competitive market for instant payments at a pan-european level. 7

8 ECB / ERPB definition, vision and way forward Conclusions In order to facilitate the emergence of safe and efficient instant payment solutions in Europe, progress in the scheme layer, the clearing layer and the settlement layer is needed and, in order to avoid fragmentation, efforts should be put in attaining greater harmonisation and standardisation; other relevant issues are to be addressed as well. The actual way to deliver instant payment solutions to end-users in the short term will be shaped by the interaction between public authorities and the demand and supply side of the market. 8

9 ECB / ERPB definition, vision and way forward Conclusions (continued) In light of the above, the ERPB is invited to reflect and possibly agree on: the need for the development and implementation of at least one instant payment scheme for euro payments open to any payment service provider in the EU; inviting the supply side of the industry (with the active involvement of the EPC as a potential scheme developer) to make a feasibility assessment of an instant payment scheme in euro to be presented at the ERPB meeting in June

10 ECB / ERPB definition, vision and way forward ERPB statement Instant payments are defined as electronic retail payment solutions available 24/7/365 and resulting in the immediate or close-to-immediate interbank clearing of the transaction and crediting of the payee s account with confirmation to the payer (within seconds of payment initiation) irrespective of the underlying payment instrument used (credit transfer, direct debit or payment card); and the underlying arrangements for clearing (whether bilateral interbank clearing or clearing via infrastructures); and and settlement (e.g. with guarantees or in real time) that make this possible 10

11 ECB / ERPB definition, vision and way forward ERPB statement (continued) Providers should not adopt a silo approach offering closed-loop noninteroperable instant payment solutions Instead: a layered approach should be taken by developing solutions for end-users leveraging on the current payment instruments (first layer); and the underlying clearing and settlement infrastructures (second and third layers). Solutions should take advantage where possible of the harmonisation and integration already achieved with the SEPA project, preventing the emergence of a fragmented European market for instant payments in euro 11

12 ECB / ERPB definition, vision and way forward ERPB statement (continued) taking into account emerging national solutions and in order to prevent market fragmentation, the members of the ERPB agreed on: the need for at least one pan-european instant payment solution for euro open to any payment service provider (PSP) in the EU inviting the supply side of the industry (in close cooperation with the demand side and with the active involvement of the European Payments Council as a potential scheme developer) to make an assessment of the issues related to pan-european instant payment solutions in euro to be presented at the ERPB meeting in June

13 Scope of the Open Forum and Terms of Reference Gilbert Lichter Secretary General Euro Banking Association

14 Scope of the Open Forum Initiated by the EBA in response to ERPB s call for action, the Open Forum on Pan-European Instant Payments is geared at fostering a practitioners dialogue on service requirements for instant payments Key objective: support the migration of minds towards instant payments Participation: open to PSPs, PSUs, suppliers and other relevant stakeholders in the payments industry Modus operandi: an open forum to which EBA provides logistical/administrative support, meeting in principle on a bi-monthly basis 14

15 Deliverables of the Open Forum Provide input to the upcoming instant payment discussions in Europe Explore perimeter for infrastructure services to support instant payments Liaise with entities engaged in evaluating related industry initiatives at European and global level [Optional:] Publication of common understanding and insight on certain topics and issues to the wider market, based on an endorsement by a majority among the participants. Such communication would list the names of the PSPs endorsing the position. Terms of Reference: 15

16 Proposal of a coordinator Excerpt from ToR The EBA will propose a Coordinator of the Forum. The Coordinator will support the Forum by, inter alia, issuing calls for meetings and proposed agendas. The Coordinator will prepare reports on discussions and activities of the forum as appropriate. 16

17 Antitrust Compliance in the Open Forum on Pan-European Instant Payments Do s and Don ts Open Forum Meeting,

18 Best Practices Open Forum meetings to strictly comply with EU antitrust law Avoid engaging in any activity that would infringe or give the appearance of infringing EU antitrust law Responsibility for both EBA and individual companies participating in the Open Forum Open Forum meetings to follow pre-defined agendas No unannounced deviations from agenda items Minutes of the discussions in the Open Forum meetings to be compiled and drafts circulated for review and approval Revert to compliance/legal officer in case of doubts or concerns as to a specific issue 18

19 Red Flags Do not share commercially sensitive information Exchanges on intended prices and sales volume = cartel conduct Exchanges on current production, costs, business plans usually highly problematic Do not participate in any statistical exercise, market survey or benchmarking exercise that allows access to individualised business sensitive information from the various reporting companies Do not discuss or agree with competitors: To limit supply of services, output, technical development or investments To allocate markets or customers To exclude (potential) competitors or alternative solutions, including boycotts 19

20 Overview of developments in the instant payments domain Hansjörg Nymphius Advisor to the Board Euro Banking Association

21 Topics 1. Real time as global trend 2. Towards instant payment services Touching which layers Replacing what Impacting all 3. Pan-European Forum on instant payments Discussion: towards a pan-european approach 21

22 RT activities around the globe Source: SWIFT 22

23 RT as a global trend Country Catalyst Initiative Status Mexico Singapore Australia Banco de México Association of Banks in Singapore Reserve Bank of Australia SPEI, instant payments in the RTGS system FAST (formerly G3) NPP - New Payments Platform USA FED Improvement of payments System; Faster Payments Task Force Canada The Clearing House Canadian Payments Association Real-time (immediate) payment system, project has started in Jan 2015 Next generation clearing and settlement system 23 Live Live since March 2014 IP solutions to go live by end 2016 Ongoing Ongoing, live implementation planned for 2018 Ongoing

24 RT initiatives in Europe Country Catalyst Initiative Status UK Regulatory Faster Payments Services FPS Poland National Clearing House (KIR SA) Express ELIXIR Live since May 2008 Live since June 2012 Sweden Swedish banks Payments in real-time BIR Live since Nov 2012 Denmark NCB with Ministry of Commerce Netherlands Finland DNB, National Forum on the Payment System FFI banking community Various other communities Express credit transfers Live since Nov 2014 Feasibility study on instant payments 2013, analysis, working group RFI for urgent payments system Ongoing Ongoing Considerations, feasibility studies, working groups 24

25 Candidates for adoption (PSP s perspective) Not to forget: cash payments! Source: SWIFT 25

26 Instant Payments layer approach PSP A PSP B Clearing Settlement

27 Instant Payments layer approach Payer-Payee PSU A PSU B PSP A PSP B Clearing Settlement

28 Instant Payments layer approach Payer-Payee PSP A PSU A Scheme based Instant Payment related messaging, processing PSU B PSP B Clearing Settlement

29 Instant Payments layer approach Payer-Payee Collaborative space to be defined: scheme processes infrastructure... PSP A PSU A Service InstP Service infrastructure PSU B PSP B Clearing pan-e Settlement

30 INFRASTRUCTURE INTERNET The layers from the EBA e-ap WG s perspective E-AP E-AP Services Digital Customer Services Interface SCT, SDD Cards, Cheques ACH Visanet, Banknet Real Time Gross Settlement DCSI Instruments Processing Settlement 30

31 Who and what is impacted? (not comprehensive) Multiple solutions resulting in various communication flows Order system Cash register Invoice mgmt Treasury Reconciliation Interface Security Fraud protection Interface AML/KYC Booking Treasury Messaging Settlement Clearing cycle Messaging Settlement Interface AML/KYC Booking Treasury Messaging Settlement 31

32 Tours de table discussion points What are the key use cases regarding instant payments from a consumer perspective? from a corporate/merchant perspective, both in the B2C and B2B space? What makes a payment instant for consumers and corporates/ merchants? What do PSPs and suppliers have to put in place to make a payment instant for both retail customers and merchant/corporate customers? 32

33 Next meeting The next meeting of the Open Forum on Pan-European Instant Payments will take place in Amsterdam on 12 th May 2015, from 8:00 to 10:00 CET. NB: The meeting will take place on the premises of EBAday 2015 before the start of the conference programme. You do not have to register for EBAday in order to attend the Open Forum meeting. 33

34 Closing remarks Wolfgang Ehrmann, Chairman, Euro Banking Association

35 Euro Banking Association 40 rue de Courcelles, F Paris Tel