Open Forum on Pan-EuropeanInstant Payments · Open Forum on Pan-EuropeanInstant Payments Frankfurt 9th May 2017. Open Forum on Pan-European Instant Payments, ... ISO 8583 + ISO 20022

Open Forum on Pan-European Instant Payments, 9th May 2017

Open Forum on Pan-European Instant Payments

Frankfurt9th May 2017


Welcome and introduction

Wolfgang EhrmannChairmanEuro Banking Association


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


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


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


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


Integrated TARGET services

TIPS explained

Rubric


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


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


Table of content

123



Rubric


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


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"


Rubric


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)


Rubric


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


Rubric


Table of content

123



Rubric


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


Thank you for the attention!

www.ecb.europa.eu/paymECB: market infrastructure and payments

@T2SECB


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


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


Confidential

Project Progress

FinishedStatus

On-going / on track

Not started


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


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


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


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


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


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


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


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


• 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


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


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)


• 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


• 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


• 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


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


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?


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


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


Thanks for your attention!


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

LIQUIDITY MANAGEMENT

LIQUIDITY DASHBOARD

LIQUIDITY TRANSFER MONITORING

THRESHOLD MANAGEMENT

Refresh

Real Time View

Participant BIC

CDNAFRPP CORE Account

Search Reinit

User profile

11/02/2017 11:35:28

*

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

64

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

65

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

66

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

66

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

67

Thank you for your attention


National initiatives – The Dutch Perspective

Inge van DijkBetaalvereniging NederlandProgram Manager Instant Payments

|

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…

|

…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’

|

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

|

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’)


|

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


|

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


Dutch commitment, rest up to the market

|

Dutch Programma well on track forupcoming milestones


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!


Coffee break & networking


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!


Questions & Answers

Hansjörg NymphiusAdvisor to the BoardEuro Banking Association


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)


Closing remarks

Hansjörg NymphiusAdvisor to the BoardEuro Banking Association


For any comments or questions, please contact us at [email protected]

Documents

Open Forum on Pan-EuropeanInstant Payments · Open Forum on Pan-EuropeanInstant Payments Frankfurt 9th May 2017. Open Forum on Pan-European Instant Payments, ... ISO 8583 + ISO 20022