SEPA Awareness Seminar - Ulster Bank

SEPA Awareness SeminarQuarter 1, 2013

Agenda• Introduction• SEPA – Background, Context, and Key Changes• SEPA Credit Transfers• SEPA Direct Debits• Technical Specifications• SEPA Project Approach• Q & ASlide 2

SEPA AwarenessBackground to SEPA

SEPA: The Single Euro Payments AreaEURO areaEU 27EEASwitzerland andMonaco32 Countries: 27 EU member states + 3 EEA + Switzerland & MonacoSlide 4

Background to SEPAPolitical Drivers:– Lisbon Accord – Single Internal Market (forpayments)– Improved consumer rights– Greater competition in payments– Common standards – greater customer mobilitySlide 5

Background to SEPA• Payment Services Directive (PSD)– EU/EEA – wide legal framework– EU approved: April 2007 & Transposed to Irish law: September2009– Strong on consumer rights and opening up competition inpayments• Regulation 260/2012– Approved by the EU Parliament on February 14 th , 2012 andpublished (came into effect) March 30 th , 2012–Set February 1 st , 2014 as ‘end date’ for SEPA implementation– ‘End’ = closure of IRECC (Irish Retail Electronic PaymentsClearing Company)Slide 6

Key Changes• BIC and IBAN– BIC: Bank Identifier Code– IBAN: International Bank Account Number– NSC and 8-digit account number to be replaced as identifier e.g.98 50 10 and 12345 678 becomes ULSBIE2D andIE12ULSB98501012345678• ISO 20022 XML– Legacy file formats to be replaced– New international standard• SEPA Schemes -Private schemes, for electronic payments in €– SEPA Credit Transfers (SCT) – January 2008– SEPA Direct Debits (SDD) – November 2009Slide 7

SEPA AwarenessSEPA Credit Transfers and Direct Debits

SEPA Credit TransfersBIC and IBAN required for all electronic credittransfers– Payroll– Accounts Payable– Single shot paymentsBulk Outgoing Payments– File Formats: Standard 27 / 18 to XML– Increased data Elements (e.g. End to End Reference)Single shot– Pricing and Timing– 140 CharactersSlide 9

SEPA Direct DebitsDirect Debit Origination– BIC and IBAN of customers:‣Conversion of existing Sort Code and Account Number base‣New on-boarding process for new customers– Bulk Payment File Conversion to ISO 20022 XML– Mandate Management– Enhanced Data Elements with Payment Files– D-5 / D-2 File Presentation CycleAnd Debtors (Payers) Rights:– No questions asked refunds – up to 8 weeks– Refund of unauthorised DDs – up to 13 months– Black Lists / White ListsSlide 10

SEPA Direct DebitsIncoming Direct Debits– Refund rights– 140 Characters of narrative– Pre-Notification– Cross-Border Direct DebitsSlide 11

SEPA AwarenessTechnical Specifications

XMLWhat is XML?• Stands for eXtensible Markup Language• Is a mark-up language much like HTML (Web page code)• Was designed to carry data, not to display data• The standards used are maintained by the International Standards Organisation and arefreely available on their website.Why has the EU decided to include XML in the SEPARegulation?• The use of XML will enforce a standard for Payment files throughout the EU when europayments are being made.• This is designed to increase competition between banks e.g. a multi-banked internationalcorporate could select one bank in one country for making their euro payments throughoutEurope.• The Irish Payments Services Organisation (IPSO) has issued a usage document.What does this mean for my business?• XML is a (very) different file format to those used today.Slide 13

XMLFundamentalRequirements~~~~~~~~~~~~~~• BIC & IBAN• ISO 20022 XML• 140 Characters• No alterationsduringexecution• E2E STP• No minimum• Maximum€1BillionPAYEE Payee’s Bank Payer’s Bank PAYERi. Type (First, one-off…)ii. Payee’s Nameiii. Payee’s IBANiv. Payer’s Name (ifavailable)v. Payer’s IBANvi. Unique MandateReference (UMR)vii. Date mandate signedviii. Amountix. Original UMRx. Payee’s idxi. Original payee’s idxii. Remittance infoxiii. Any purpose ofcollectionxiv. Any category ofpurposei to xiiPlus:1. BIC of Payee’s PSP2. BIC of Payer’s PSP3. Payer ref. party name4. Payer ref. party id5. Payee ref. party name6. Payee ref. party id7. ID of payment scheme8. Settlement date9. Type of mandate1. UMR2. Payee’s id3. Payee’s name4. Amount5. Remittance info6. Id of schemeSlide 14

SEPA AwarenessSEPA Project Approach

Sample Project Approach• Proposed Project Phasing• Key changes imposed & opportunities provided by SEPA understood• Impact on People, Processes & Systems understoodSlide 16

Thank You?QuestionsFor more information visit :http://www.ulsterbank.com/roi/business/cash-management-and-payments/makingpayments/sepa.ashxOr email us at:SEPAinfo@ulsterbank.comSlide 17

This presentation is provided for information purposes only and should not be regarded asproviding any specific advice. Recipients should make their own independent evaluationof this information and no action should be taken solely in reliance on it. While theinformation is believed to be reliable, Ulster Bank makes no representation or warranty(express or implied) as regards the accuracy or completeness of the information; nor doesUlster Bank accept any responsibility or liability for any loss or damage arising in any wayfrom any use made or, or reliance placed on, this information.The contents of this document are confidential and all information and proposals containedherein are to be treated as commercially sensitive. You may copy the document for thepurposes of internal evaluation only, but it must not be disclosed outside yourorganisation without the Bank's prior written consent.All rates are provided for indicative purposes only without liability or prejudice to Ulster Bank.The rates can and do change over time.Copyright 2012 Ulster Bank Ireland Limited. All rights reserved.Ulster Bank Ireland Limited. A private company limited by shares, trading as Ulster Bank,Ulster Bank Group and Banc Uladh. Registered in Republic of Ireland. Registered No25766.Registered Office: Ulster Bank Group Centre, George’s Quay, Dublin 2. Member of The RoyalBank of Scotland Group.Ulster Bank Ireland Limited is regulated by the Central Bank of Ireland. Calls may be recorded.Slide 18