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Sepa 1717131461

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35 views5 pages

Sepa 1717131461

Uploaded by

gayatri.bala82
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Single Euro Payments Area

Need for SEPA


→ Common currency
→ Message harmonisation
→ Increased efficiency
→ Common technical standards
→ Common business standards
→ Focuses mostly on Retail
Payments
SEPA payment Schemes & Stakeholders
SEPA payment schemes are a set of rules for Payment Service Providers (PSPs) developed by the European Payments
Council (EPC) for electronic payment processing transactions.
SEPA payment schemes include rules for :
▪ SEPA Credit Transfer Scheme (effective January 2008)
▪ SEPA Instant Credit Transfer Scheme (effective November 2017)
▪ SEPA Direct Debit Core Scheme (effective November 2009)
▪ SEPA Direct Debit Business-to-Business Scheme (effective November 2009)
Stakeholders
Legal Monitoring Authority Development of SEPA
EPC (European Payment Council ) :
EU Parliament & Council : Law making ECB : It is the central bank of eurozone Responsible for development of SEPA rules
body ,central bank of each of the countries is .Publishes yearly rulebook which contains
represented here . latest changes to SEPA .
EURO Retail payments board : Headed by the
European central bank and promotes
innovation, integration and the
European Commission : Has power to competitiveness of the euro retails payments
amend technical requirements. ECOFIN in the EU
ECOFIN : proposes laws related to SEPA
and monitors economy of EU member
states
Features of SEPA schemes??
SCT :
✓ 1 business day SDD Core
✓ IBAN and BIC are used in the interbank space. Only IBAN is ✓ 2-3 business days
used in the Customer-to-Bank space
✓ IBAN and BIC are used in the interbank space. Only IBAN is used in the
✓ The full amount is credited to the payee’s account Customer-to-Bank space
✓ Remittance data up to 140 characters ✓ Creditor must receive a signed mandate from the debtor and is
responsible for holding and modifying it.
✓ Ability to send or receive payments ‘on behalf of’.
✓ Remittance data up to 140 characters
✓ The scheme defines standard formats for messages related
to exception handling for wrongly or unsuccessfully ✓ Ability to send or receive payments ‘on behalf of’
processed transactions

• SCT instant : SDD B2B :


✓ At least 3 business days
✓ Availability 24/7/365 – The services based on the SCT Inst Participation in the SDD B2B scheme is optional.
scheme are available 24 hours a day and on all calendar
days of the year. ✓ The SDD B2B is used between businesses for funds collections.
✓ An initial maximum duration of 10 seconds ✓ If the transaction was authorized with a signed mandate, the debtor
✓ An initial maximum amount of 10,000 euros has no refund rights after the SDD execution.
✓ Flexibility – SCT Inst scheme participants can agree on either ✓ The debtor can obtain a refund only for an unauthorised collection not
a bilateral or multilateral basis on a shorter execution time covered by a valid mandate
and a higher maximum amount.
Clearing & Settlement
More on Step 2
• Clearing : STEP2 (pan European operated by EBA clearing) , →STEP2 –T offers different processing modes depending on the requirements of
local ones, such as the French CSM CORE which is owned and sender & receiver:
operated by STET, a group of 6 major French banks, and is used
Bulk Processing Batch Processing
for payments between banks in France, RPS in Germany .
• Settlement : Target 2(Trans-European Automated Real-time All banks are included by default Banks may optionally join
Gross settlement Express Transfer), ,Euro1 . ECB and EBA both
offer clearing and settlement mechanisms (CSM) for SCT Inst. Sending bank pre-sorts & groups
The ECB offers the Target Instant Payment Settlement (TIPS) All receivers are mixed together payments for counterparties with
for SCT Inst, EBA offers RT1 for this whom they have agreed to exchange
payment in this mode
• Instant : SCT instant , TIPS(TARGET instant payment
settlement) ,RT1
STEP2 creates new output file for each Step 2 does not have to re-sort
• T2S for securities : The fundamental objective of the T2S receiving bank payments into new files
project was to integrate and harmonize the highly fragmented
securities settlement infrastructure in Europe.
Main Flows

SCT SDD

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