SEPA Session info ERP Banque nationale de Belgique - 15/04/2013

MOB ERP/IT - 15/04/ / 34 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

MOB ERP/IT - 15/04/ / 34 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

MOB ERP/IT - 15/04/ / 34 SEPA - End date regulation 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 … … Today

MOB ERP/IT - 15/04/ / 34 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 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

MOB ERP/IT - 15/04/ / 34 SEPA - XML ► XML TagOccurrenceNom FinancialInstituti onIdentification [1..1]TAG BIC{Or [0..1]BIC-format OtherOr} [0..1]TAG Identification [1..1]Max35Text Ou le BIC, ou Other > Identification doivent être utilisés. Le Bank Identifier Code (BIC) se compose de 8 ou 11 caractères, dont seuls les 8 premiers sont significatifs. Seule la valeur “NOTPROVIDED” est permise pour Other > Identification.

MOB ERP/IT - 15/04/ / 34 SEPA - IBAN ► ctory_products/iban_format_registry/index.page

SEPA Credit Transfer

MOB ERP/IT - 15/04/ / 34 Graphic 1: Transfers in SEPA format ( February 2012) (% of the total number of bank transfers) Sources: European Central Bank (ECB) and the Centre for Exchange and Clearing (CEC).

MOB ERP/IT - 15/04/ / 34 SCT Migration Project 1. January 2008 : SCT Start – up 2. October 2011: End of Legacy Paper Acceptance (BE) – 2012: Communication campaign Febelfin / NBB 4. End Date : 01/02/2014 no domestic payments types can be used 10 37% to go

MOB ERP/IT - 15/04/ / 34 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

SEPA Direct Debit

MOB ERP/IT - 15/04/ / 34 Migration to SDD in Belgium (July July 2012) Sources: European Central Bank (ECB) and the Centre for Exchange and Clearing (CEC). (% of the total number of transactions)

MOB ERP/IT - 15/04/ / 34 SDD transactions in Europe Source: ECB (% of the total number of transactions)

MOB ERP/IT - 15/04/ / 34 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

MOB ERP/IT - 15/04/ / 34 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!!

MOB ERP/IT - 15/04/ / 34 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

MOB ERP/IT - 15/04/ / 34 Mandate management - Migration from DOM80 to SDD ► DOM80 data are uploaded by the debtor banks according to a predefined calendar ► Those data are enlarged with IBAN and BIC ► Creditor banks can download DOM80 data as often as they wish ► Once a creditor begins with its migration code M/S: avoid creation of new DOM80 by debtor banks ► Once a creditor finished its migration form to NBB: removed from the file

MOB ERP/IT - 15/04/ / 34 End date regulation End date = 01/02/2014 Belgian banks did not ask a waiver on the Member State options

MOB ERP/IT - 15/04/ / 34 Member State Options Article 16.6Postponement of the Leading IBAN principle for national Transfers and Direct Debits to 01/02/2016 Article 6.4 End dates for national Credit transfers & Direct Debits 01/02/2014 Member states are allowed to opt for an earlier adoption than the stated end dates Article 16.1 Conversion services for national payment transactions BBAN -> IBAN for consumers - Germany, Spain Non-consumers must provide the correct IBAN to the PSP Article 16.5 Format conversion services local format -> XML (batches converted internally by the PSP into XML) - Spain, Italy Articles 16.3/16.4 Niche products market share less then 10 % postponed to 01/02/2016 ELV Direct debits: in the frame of direct debits linked to the use od debit cards 01/02/ Germany, Spain, France

MOB ERP/IT - 15/04/ / 34 3 LEVELS Group Header « Group header » (FILE) Payment Information 1 Payment Information 2 Payment Information 3 « Payment Information » (BATCH) Transaction Information 1 Transaction Information 2 Transaction Information 3 Transaction Information 4 Transaction Information 5 Transaction Information 6 « Transaction Information » (PAYMENT) XML structure File structure

MOB ERP/IT - 15/04/ / 34 XML structure XML and only XML For each DD batch Same Due Date Same Sequence Type: First(D-5) Recurrent(D-2) Final(D-2) One-off (D-5) Same Scheme

MOB ERP/IT - 15/04/ / 34 Test your files ! ► Tools are available at banks side to test your XML files ► Your files can be analysed ► Errors are explained ► Validation is proposed

MOB ERP/IT - 15/04/ / 34 Lifecycle of the sequence types

MOB ERP/IT - 15/04/ / 34 Reporting ► The management of the files/batches and transactions has an impact on the reporting ► Booking at batch level ► If customer has a “global” parameter, he can also ask for details of the batch (request is made to the banks)

MOB ERP/IT - 15/04/ / 34 “ R’s” transactions

MOB ERP/IT - 15/04/ / 34 “R’s” transactions

MOB ERP/IT - 15/04/ / 34 The Pre-Notification The creditor can send the pre-notification separately or can consider the invoice as a pre-notification. The creditor & the debtor can agree about another timing for the pre-notification. Paper, , sms… The provider sends to the debtor a preadvice at least 14 days before the due date. Pre-notification Mandate reference : Name of the supplier : Subscription Magazine ABC Amount : 57,23 euros Payment date : every year 15th of January First payment : 15th of January 2009 Pre-notification Mandate reference : Name of the supplier : Subscription Magazine ABC Amount : 57,23 euros Payment date : every year 15th of January First payment : 15th of January 2009 Pre-notification mandatory if amount and/or debit date changes

MOB ERP/IT - 15/04/ / 34 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. The mandate

MOB ERP/IT - 15/04/ / 34 DOM 80 >< SEPA Direct debits In the DOM 80 system, you could as creditor collect the money (credit of your account) but also reimburse your customers for any amount (debit of your account). In the SEPA Direct Debit system, reimbursements are possible via “Reversal” if same amount as for debit and same transaction reference. Otherwise, a Credit transfer will be needed. SEPA DD: Reimbursements are not possible

MOB ERP/IT - 15/04/ / 34 Non-target days  New Year's Day  Good Friday  Easter Monday  1 May (Labour Day),  Christmas Day and 26 December

MOB ERP/IT - 15/04/ / 34 DOM 80 number and SEPA unique reference ► Dom 80 number can be: Unique 3/7/2 positions: most of the banks 3/7/2 is the account number of the debtor: ING, Bank Van Breda, others ? SEPA unique reference provided by the creditor needs to be different of the account number

MOB ERP/IT - 15/04/ / 34 DOM 80 number & SEPA unique reference ► 1 contract = 1 mandate reference following the SEPA Rulebooks ► 1 DOM 80 number = 1 unique mandate reference ► Quid if different contracts with the same DOM 80 number ? ► National Bank file has foreseen 6 positions beside the 3/7/2

MOB ERP/IT - 15/04/ / 34 DOM 80 number & SEPA unique reference ► Example If 1 DOM 80 number covers different contracts, the 6 positions next to the 3/7/2 can be used 3/7/2 …..1 -> 1 SEPA reference for the contract 1 3/7/2 …..2 -> 1 SEPA reference for the contract 2 3/7/2 …..3 …

MOB ERP/IT - 15/04/ / 34 Latest status SEPA E-mandates 2. Survey in Q4, 2012 at National level ► Task force at EPC level ► Task force at Febelfin level ► 2. Fixed amount scheme ( or non refund SDD scheme ) ► Code of conduct ? Scope ? ► 3. Core 1 ► Austria, Germany, Spain

MOB ERP/IT - 15/04/ / 34 Conclusion ► Go for it ! Less than 200 days left ► There is no option, mandatory by law, the creditors need to be migrated for the 1st Feb, 2014 ► A lot of opportunities for your customers ► Banks and the National Bank are ready to support you in providing more information ► Please, put the SEPA module in a current version of the software

Communication

MOB ERP/IT - 15/04/ / 34 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."

MOB ERP/IT - 15/04/ / 34 Communication plan NBB (March 2012 – February 2014)

MOB ERP/IT - 15/04/ / 34 Communication - Support NBB ► Toolkit ● One pager ● Videos ● PPT Presentations ● Links: ECB, EPC, Febelfin,... ► Other ● Presentations ● Documentation ● Op demand...

MOB ERP/IT - 15/04/ / 34 Communicatie - Support NBB

MOB ERP/IT - 15/04/ / 34 Useful SEPA links ► SEPA Belgium ( ► Febelfin ( ► NBB ( ) Payment systems - SEPA ► European Payments Council (EPC) ( ► ISO standard (