Solutions

SEPA Credit Transfers (SCT)

Consolidating Eurozone Credit Transfers

The worthy primary aim of the Single Euro Payments Area (SEPA) is to ensure that euro payments, whether domestic or cross border, are handled with the same level of service and at the same price. This is essentially the logical second phase of monetary union that saw the introduction of the euro currency notes and coins.

The European Central Bank (ECB) is seeking to transform fragmented national payments systems into a single payments area (SEPA), essentially making all euro payments domestic for European citizens and companies. SEPA promises users potentially lower costs and greater transparency of fees, but banks will lose revenue currently earned on cross-border payments. SEPA covers three main aspects; direct debits, credit transfers and card payments. From a payments perspective, the Direct Debits and Credit Transfers pose the largest challenges.

SEPA Credit Transfers

Compliance with credit transfers under SEPA is considerably less complex than the parallel direct debit scheme and can be viewed as a first step towards overall SEPA compliance with full SEPA Direct Debit support. SCT compliance covers initiation and receipt of credit transfers (originator and beneficiary banks), support of BIC and IBAN, support for UNIFI ISO20022 messages, exception management (R-transactions) and PEACH interfacing (e.g. STEP2).

The vast majority of banks have implemented tactical solutions for SCT in order to be ready for the initial 2008 SCT go-live date. For most, these short-term solutions are based on established legacy systems that were originally designed for relatively low volumes of payments. With SCT currently only accounting for 2% of European credit transfers, these stop-gap solutions are likely to struggle in the face of rising volumes over the coming years. With the European Central Bank pressuring the community to retire domestic credit transfers, and banks seeking to rationalise their IT infrastructure, SCT processing solutions are needed that are in line with this long-term view.

SEPA Credit Transfers - Payment Flows

SEPA Credit Transfers

An Open Payment Framework to support SEPA

Clear2Pay’s Open Payment Framework is already SEPA compliant. The Open Payment Framework (OPF) from Clear2Pay is a library of component building blocks from which payments solutions can be derived. The Open Payment Framework is built entirely on a Service Oriented Architecture (SOA) delivering common, reusable services consisting of a comprehensive data model, choreographed payment business processes and configurable services including parsing, validation, cost-based routing, warehousing, security, auditing and many more.

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