– Confidential –

STEP2 and the SEPA migration end date

SEPA Migration Day

Brussels, 20th March 2013

John Broxis

Service Director STEP2

Confidential

Agenda

• Introduction of EBA CLEARING

• 10 years of STEP2 - the Pan-European ACH

• Preparations for the SEPA migration end date

• MyBank

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Confidential

Introducing the EBA Group

EBA

Euro Banking Association

EBA CLEARING

Operator of

EURO1/STEP1/STEP2

• Discussion forum for payment

practicioners

• Developer of European payment

initiatives

• Founded 1985

• Over 210 members

• Operates the pan-European

payment sytems EURO1, STEP1,

STEP2 (SCT/SDD Core + B2B)

• Founded 1998

• 64 Shareholders

• About 250 direct participants

3

Confidential

• Introduction of EBA CLEARING

• 10 years of STEP2 - the Pan-European ACH

• Preparations for the SEPA migration end date

• MyBank

Agenda

4

Confidential

Create simplicity

5

Expensive Fragmentation Cost efficient Integrated payments

environment

Confidential

STEP2: the pan-European SEPA platform

Migration of national volumes to standard STEP2 SEPA Services

Migration of national volumes to dedicated STEP2 Services supporting national legacy

formats

Legend:

Migration of national communities to STEP2

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Confidential

STEP2: the pan-European SEPA platform

100%

reachability

SCT SDD

Performance

Resilience Governance

Functionality Pricing

Compliance

AOS

VAS

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Confidential

Reach

25 91

46 168

135 14 16

13

27 96

65

78

230

2,582

383

191 123

22

35

42

76

11

31

24

20

30 9

16

18

26

30

Status: March 2013

STEP2 SCT Service

Reachable Banks

3

125 of which are Direct

Participants

STEP2 SCT

4,676

8

Confidential

STEP2 February Statistics

STEP2 Daily Average Volumes

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Confidential

STEP2 SCT Monthly Statistics

Percentage of SCT Monthly Traffic Sent by Country

10

AT 2.49%

BE 4.68%

BG 0.04%

CH 1.61%

CY 0.27%

CZ 0.40%

DE 13.58%

DK 0.40%

EE 0.15%

ES 2.12%

FI 37.78%

FR 11.32%

GB 1.13%

GR 0.15%

HU 0.21%

IE 1.68%

IS 0.01%

IT 11.47%

LI 0.02%

LT 0.09%

LU 3.03%

LV 0.16%

MC 0.07%

MT 0.08%

NL 4.59%

NO 0.26%

PL 0.49%

PT 0.35%

RO 0.10%

SE 0.74%

SI 0.20%

SK 0.32%

Confidential

STEP2 SDD Core Monthly Statistics

Percentage of SDD Core Monthly Traffic Sent by Country

11

AT 0.20%

BE 92.42%

CH 0.02%

DE 4.17%

ES 0.04%

FR 0.98%

GB 0.16%

IE 0.28%

IT 0.03%

LU 0.01%

MC 0.04%

MT 0.97%

NL 0.19%

SI 0.49%

Confidential

• Introduction of EBA CLEARING

• 10 years of STEP2 - the Pan-European ACH

• Preparations for the SEPA migration end date

• MyBank

Agenda

12

Confidential

How many payments are there?

30th October 2012

13

Confidential

SEPA migration end-date requirements

30th October 2012

14

Confidential

STEP2 Roadmap for the SEPA Migration End Date

Releases:

SCT Additional Cycles 20th February 2012

SCT Batch Processing 30th April 2012

STEP2 Performance Program July 2012

SCT & SDD Rulebook (+ other) Changes 19th November 2012

SCT & SDD Functional Releases Q1 / Q2 2013

SCT 4pm Cycle September 2013

15

Confidential

STEP2 Batch Processing

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Confidential

SEPA migration end-date requirements

30th October 2012

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Confidential

• In 2009, EBA CLEARING mandated IBM to perform a

benchmarking of STEP2 System. It demonstrated that:

– STEP2 was capable of processing > 10 million transactions per day

– With simple software and hardware improvements and using IBM

scalability, a much higher volume could be achieved

• During 2009 – 2011, various improvements were made:

– Natural evolution of hardware and processors

– Some software and parser changes to remove bottlenecks

• In 2011, it was decided to conduct another complete

assessment of the processing capacity and overall

performance of STEP2

STEP2 Performance enhancement program

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Confidential

19

Measure

Evaluate Plan

Change

STEP2 Performance enhancement program

Approach:

- Priorities and objectives were defined

- Possible enhancements were

discussed and then tested in

isolation, and then rated against the

measurable performance

improvement

- Qualified enhancement were then

planned for a future release

Confidential

• The final test of the program was run with all the qualified

enhancements implemented on the dedicated environment and using

realistic test scenarios.

• When all improvements will be implemented, STEP2 will be able to

process over 500 million payments per day

STEP2 Processing Capacity

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Confidential

SEPA migration end-date requirements

30th October 2012

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Confidential

• Today, STEP2 has state-of-the-art

resilience capabilities.

• In November 2013 EBA CLEARING

decided to built and operate a third

site for STEP2 in another country.

• A third site, located in another

country will give full technical,

legal and operational resilience.

SEPA migration end-date requirements

30th October 2012

22

Confidential

Resilience

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• EBA CL is partnering with SIA and IBM

who will provide the ‘third’ site by the end

of 2013.

• The site chosen is one of the most secure

data centers in Europe, designed and

built for banking infrastructures.

Confidential

SEPA migration end-date requirements

30th October 2012

24

Confidential

• New pricing model for banks with

large volumes.

• Move towards, fixed price for over

500,000 payments per day.

• Pricing will fall for very large

volume users.

SEPA migration end-date requirements

30th October 2012

25

Confidential

Beyond SEPA migration…

26

30th October 2012

Confidential

And after the end date…

• Meet the requirements for Systemically important systems and

secure settlement.

• Introduce SEPA card clearing

• Introduce multi-currency processing to Support the Nordic banks in

their creation of a Nordic Payment Area (NPA)

30th October 2012

27

Confidential

• Introduction of EBA CLEARING

• 10 years of STEP2 - the Pan-European ACH

• Preparations for the SEPA migration end date

• MyBank

Agenda

28

A secure Europe-wide e-authorisation service

for e-commerce transactions

What is MyBank?

29

• Consumers want a simple, trusted and secure online payment solution

• Merchants look for improved online payment methods

• Payment Service Providers (PSPs) are keen to (re)position themselves and leverage use of online banking portals

• Public Policy pressure on the PSPs to innovate ‘beyond SEPA’

The market wants a solution

30

E-Mandates

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E-Mandate

• SEPA Rulebook compliant solution

• Create, modify and cancel SDD mandates electronically. No Paper.

• Debtor Bank confirms that the Debtor has signed the electronic mandate.

− Creditor refund period limited to eight weeks, instead of 13 months.

− Debtor Bank can comply with Debtor’s instructions concerning white listing.

Mobile Payments

33

The future…

• MyBank solution can be further developed to facilitate:

− Mobile use

− Payment on delivery

− E-identity services such as age verification or address verification

− E-Invoicing

Buying while waiting for the train…

Great! Madonna in concert next month. I wonder if I can still get tickets?

Let’s click and buy

I scan….

… and I

authorise the

payment.

…I authenticate myself…

E-Identity

37

The future…

• MyBank solution can be further developed to facilitate e-authorisation

− Are you over 18?

− YES

− Do you have an address in France?

− YES

− Are you really John Broxis?

− YES

Support for MyBank

39

Who’s talking about MyBank?

Ecommerce Europe

• Ecommerce Europe was founded by leading national e-commerce associations across Europe

• For more information, please also see www.ecommerce-europe.eu

50 supporting payment service providers

• A growing number of PSPs across Europe have declared their support for the solution

• A list of potential future participants can be found at: www.mybankpayments.eu/N=List_of_Potential_future_participants.aspx

MyBank, live in

Luxembourg

• 11 Financial institutions will join MyBank on 25th March.

• 9 Financial institutions from Italy.

• Support from major Italian internet merchants during the Pilot phase.

Support in Italy

44

MyBank launch: 25th March 2013

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To learn more…

www.mybankpayments.eu

46

Confidential

www.ebaclearing.eu

EBA CLEARING

40 rue de Courcelles, F-75008 Paris

Tel. +33 1 53 67 07 00