SEPA

A newsletter from SEB’s SEPA Group  •  www.sebgroup.com/sepa April 2010

It’s been quite a while since the

last newsletter, but the work to achieve
a single euro payments area is still
going forward.

Even so, some obstacles remain. There

are, as you all know, not only a variety
of products to develop but also a great
number of countries to coordinate.
But the most significant hurdle on the
road to full SEPA adoption is the lack of
certainty regarding an end date for all
participating countries, which has led
to the process taking a different pace
in the various member states. By now
the PSD is more or less in place and
the development of SEPA products is SEPA migration going on
right now – in Finland
proceeding well, but because of this
uncertainty the migration of domestic
payments to SEPA lacks momentum.

As a contrast to this, Finland has The Finnish SEPA migration plan was updated in February 2010 as
recently communicated that it has a joint effort by the relevant stakeholders in the market. The original
decided to abandon the domestic
scheme now and take up SEPA national SCT December 2010 end-date got a 10 months extension
instruments fully before the end period.
of 2011. Read more about this in
Harri Rantanen’s and Olli Savolainen’s Updated migration plan for SEPA Also Bank-to-Customer reporting will
article. Credit Transfer includes the following change (according to each bank’s own
firm deadlines: schedule). Banks in Finland have al-
Also, from the interview with Björn • Creditors will include IBAN and BIC ready made a description of replacing
Flismark on page 2, it is clear that on all outgoing invoices as of 1 July local bank account reporting formats
a decision on end-date legislation is 2010 with the ISO 20022 standard. Interna-
in fact getting closer. Already by the tional creditors’ reference (ISO 11649)
• Officially, the SCT transition period
end of 2012 all stakeholders could will be taken into use from 1 December
will end 2010 but both banks and
be pushed to adopt SEPA. 2010, enabling further automatic rec-
software providers may prolong
onciliation of cross border receivables.
their offering of legacy credit trans-
Welcome to this spring issue of
fer and payment format services Continues next page
SEPA News!
until October 2011
• Payment files in Finnish national
legacy formats not accepted after
1 November 2011
• Banks will stop clearing local Finnish
payments by December 2011
Henrik Bergman
SEPA Global Product
Manager, SEB

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 A newsletter from SEB’s SEPA Group

Benefits and challenges for

corporates and banks
The national SEPA forum of corporates,
banks, authorities, software vendors,
consumer interest groups and mer-
chants constantly strives towards a
smooth migration by solving problems
and making suggestions for further
development. Thanks to this, SCT
already enables a service level at par
with the legacy instruments – hence
making it more and more lucrative for
corporates to migrate to SEPA.

By implementing SEPA properly for

Finnish transactions a corporate
When can we expect a
customer is able to start using SEPA
payments for other countries too. complete migration to SEPA?
This will result in a harmonised and
consolidated, i.e. more efficient, Björn Flismark, deputy chairman of the Euro Banking Association and
accounts payable process. Using one, member of the European Payments Council, argues for an end date in
centralised IBAN bank account in
order to get all stakeholders on board and in sync. “The advantage is
customer invoicing enables immediate
rationalisation of cash positioning and that it sends a strong signal to all stakeholders that they must adopt
euro flows forecasting. SEPA. Doing nothing is not an option since legacy payment services
will not be available anymore from a certain date”, he says.
Getting rid of local clearing systems,
interfaces and operations is beneficial The move towards SEPA seems to includes choice of what type of legis­
also for the banks. This will help us be a slow one. SEPA Credit Transfers lation to use.
offer services to customers even more started in January 2008 and two years
cost-efficiently than before. later only six per cent of payments are According to Björn Flismark it is most
done through SCT. And SDD has only likely that this will be a regulation
However, these benefits are not for been operational since November which is directly applicable in all EU/
free. Comprehensive planning and 2009 with very few Direct Debits being EEA countries.
implementation requires investments processed.
and already scarce human resources. Another important question is if there
All stakeholders need to do their Is this the right time to talk about legis- is going to be one end date or separate
share… lation on end date for SEPA migration? end dates for SCT and SDD. One idea is
to have an earlier date for SCT.
“There are some that think so, among
SEB´s SEPA status in Finland others the new commissioner for the “However it would make things more
• Every sixth EUR transaction run in Internal Market and the European Par- complicated to have two end dates”,
SEPA mode liament for example”, Flismark says. says Flismark.

• Started to migrate its local file-based The new Commissioner Barnier said The geographic scope is primarily the
transaction channel customers to in January that he intends to propose Euro area even though it is likely that
the global SEPA enabled channel, legislation with the objective of setting the regulation would also cover non-
Global Corporate Access one or more deadlines for migration euro countries – but at a later time,
• Offer other than SEPA related services to SEPA products for direct debits and perhaps one or two years later.
in the same one-point-of-entry solution credit transfers.
“The timetable for proposal on legisla-
The European Parliament adopted a tion is mid 2010. This means that a reg-
Olli Savolainen, resolution in March 2010 asking the ulation could be adopted this autumn
Head of Cash Management, Commission to set a binding end date to come into force by the end of 2012.
Merchant Banking Finland for migration to SEPA products by This is a very challenging timetable
31 December 2012, after which all pay- which will put a lot of pressure on all
Harri Rantanen, ments in euro must be made using the stakeholders”.
Manager, Formats & Standards, SEPA standards.
Merchant Banking Finland Anna S Marcus,
The Commission is now making a SEPA PSD Communications Manager,
so called Impact Assessment. This SEB

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 A newsletter from SEB’s SEPA Group

PSD stragglers
close to the finish
line
Almost all EU/EEA countries
have by now implemented
the Payment Service Directive
(PSD) in national law and most
banks are now finalising their
adaptation efforts.
Despite some delays, Finland and
Estonia will have national PSD
legislations into force in May. Sweden
is expected to have implemented the
directive by 1 July 2010. The Swedish
government bill on the complete legal
draft will however not be final before
end of April and the Parliament
adoption is planned as late as

SEPA Direct Debit launch beginning of June. Only Poland and

Iceland will thereafter be resting until
late 2010 with their adoptions of the PSD.
step by step This means that from mid 2010 the
new routines and market practice
As expected the SEPA Direct Debit An example of such functionality is an for payments based on the harmo-
(SDD) has not yet accelerated in early distribution of mandate related nized legislation can be expected in
regards to users and transaction vol- information to the debtor before the general in the EU/EEA markets. There
umes. It is natural that it takes longer first collection. If presented by the are still though some interpretation
to adapt to new direct debit schemes debtor bank the payer will have the notes being published on European
than to the SEPA Credit Transfer chance to react early and block man- Commissions blog and discussions
for several reasons. Dependency to dates that he may see as unauthorized. in banking forums are ongoing about
the launch of the Payment Services which interbank practices that should
Directive which was delayed, major SEB sees it natural that the SDD product be applied.
fragmentation between practices in will need some gradual enhancement
different current domestic Direct Debit over time. Focus for us is now the launch For payment service users the changes
schemes and being quite a complex of a SDD Creditor offering to make introduced with the PSD can now be
product involving the mandate up the SDD debtor offering already summarized. Worth to note is which
relationship between creditors and launched for the Core scheme (B2B). provisions for member state options
debtors are natural reasons leading to Launch of the SDD B2B Debtor and that have been applied in each country
a drawn out period for the SDD market Creditor products are planned for as well as some significant variances
take up. The European Central Bank the autumn. At then we expect to see in national interpretations of the direc-
and the Commission have recently further interest for the SDD with the tive. Those variances are expected to
officially requested banks, in a letter new EPC scheme releases and also rule for a while but not to be perma-
to the European Payment Council, to probably some concrete declarations nent. Already 2012 the European
continue with further enhancements in on a SEPA migration end date which Commission will perform a follow up
coming releases of the SDD schemes. would encompass migration of domes- on the PSD with the objective to evalu-
tic direct debit schemes to SDD in euro ate its feasibility and further align the
There are already fully functioning di- countries. national implementations.
rect debit schemes launched – both for
B2C and B2B purposes. The different Henrik Bergman Henrik Bergman,
practices in local direct debit applica- SEPA Global Product Manager, SEB SEPA Global Product Manager, SEB
tions will however raise demand for
different optional services in the SDD.

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 A newsletter from SEB’s SEPA Group

SEPA stakeholders gain

stronger voice
SEPA governance has been discussed for a long time. Some stake-
holders feel that they do not have enough influence. Others, like the
ECB and the Commission say that the SEPA process and the migration
must be much better coordinated.
As a result, the decision has been taken The creation of the SEPA Council is
to establish a SEPA Council which will another important sign of the importance
have the following members: that EU authorities attach to the success
One member each from Consumers, of SEPA. The EPC has played a central
Retailers, Businesses/corporates, role in the SEPA work for the last 8 years
Small and medium-sized companies and will continue to be an important
and national public administrations stakeholder. But is it clear that also other
stakeholders will now get a stronger
One member each from co-operative voice.
banks, savings banks, commercial
banks and payment institutions and Björn Flismark,
from European Payments Council Deputy chairman of the EBA,
Four members from Euro Central member of the EPC,
Banks Senior advisor GTS product
management and development,
The SEPA Council will be chaired by the SEB
European Central Bank and the European
Commission jointly. The tasks of the
SEPA Council will be:
Realisation of an integrated euro retail
payments market
Deliver on the SEPA vision with strategic
direction for EU retail payments
Monitor and support the SEPA migration
process
Ensure accountability and transparency
of the SEPA process