A low cost access to pan-european single payment processing

Transcription

1 A low cost access to pan-european single payment processing

2 Overview is a payment service for individual commercial payments, complementary to EURO1. It enables small and medium-sized banks to benefit from EBA CLEARING s intra-day processing infrastructure. By implementing in November 2000, EBA CLEARING broadened access to the EURO1 platform: s are able to directly exchange payments with each other, as well as with the entire community of EURO1 s. While s are not involved in the risk and loss sharing arrangements of EURO1, they benefit from the sound technical and legal infrastructure of EURO1. The limited technical arrangements required for connecting to and the operational simplicity of the system allow for significant cost savings by the participating banks. Admission to requires neither a minimum credit rating nor a minimum of own funds. A Participant settles with a EURO1 of its choice, which in turn provides the Participant with the liquidity it requires in the system. The EURO1/ Directory, launched in 2009, further broadened the reach for EURO1 / s by allowing them to list their reachable banks (branches, subsidiaries and correspondent banks) worldwide. Today, more than 30,000 BICs can be reached directly or indirectly via the EURO1 / platform. As at April 2011, 93 s and 44 Sub-Participants were connected to and an average daily volume of over 21,000 payments for an average daily value of EUR 1.7 billion was exchanged through the system. Benefits Pan-European access: provides small and medium-sized banks with access to a pan-european single payment platform facilitating intra-day processing of important or urgent transactions Extensive reach: Participants are able to directly exchange cross-border and domestic payments with over 260 European banks. With the help of the EURO1 / Directory, s can additionally address 2,100 third party banks across the world through the EURO1 / correspondent banks of these institutions Flexibility: As is based on international SWIFT message formats, it allows participants to channel euro transactions through the service where the originator or the beneficiary account is located outside the Single Euro Payments Area Low cost: Thanks to its moderate pricing and the minimal technical adjustments it requires at the level of the banks, is very attractive from a cost point of view Independence: While s settle their obligations with the support of a EURO1 Participant acting as their settlement bank, they manage and control their payment flows directly via an Interactive Workstation (IWS). Their payment flows are not visible to the settlement bank Robust system: benefits from the legal soundness and technical robustness of the EURO1 infrastructure Operational simplicity: The Interactive Workstation through which s manage their payment traffic functions in a similar way to the TARGET2 Information and Control Module (ICM) allowing banks to have a common approach to their back-office processes

3 Functioning Message routing and real-time processing Direct exchange of MT103, MT 202, MT 202COV, MT 204, MT 400 payment messages partial copy If yes, partial copy to If no limit breach, both positions are updated and message is released to receiving bank. Payment messages that would cause limit breach are queued in the system. Interactive Workstation allows for the moni toring of liquidity position and payments A s position resulting from processed payment messages can never be negative, i.e. s have a zero debit cap. s square their daily balances via a EURO1 of their choice, which acts as their Settlement, providing liquidity against the potential net balance but never seeing the individual payments constituting these balances. Cut-off time and processing cycle Start-up Sending Payments Cut-off for value D Potential Net Balance available to banks Balances at zero Sending MT ERP Tag yes/no? MT Receiving Processing FIN Copy Service Capacity Transfers SWIFTNet FIN Network EURO1 Processing processes retail payment orders and bank-to-bank transfers related to such commercial transactions. 7:30 14:30 14:40 16:00 Payments exchanged in are for amounts that do not create the need for systemic risk protection. If a single message exceeds the sending capacity of the sending bank or the receiving capacity of the receiving bank, it is rejected by the system. The minimum capacity is EUR 2 million and the maximum EUR 50 million. Any payments that would result in a limit breach are put in an on-hold queue, which is continuously revisited.

4 Reach s can directly exchange payments with all Participants and Sub-Participants in EURO1 and, since all EURO1 institutions can automatically send and receive payments via as well. Participants may include their own branches and subsidiaries as Sub-Participants (to learn more about the benefits of this participation mode, please consult our publication on EURO1 / Sub-Participation). reach: direct coverage by country Countries s Participants * Austria 7 11 Belgium 1 5 Cyprus 3 3 Denmark Estonia 3 Finland 4 8 France 5 20 Germany Greece 1 7 Hungary 1 Ireland 3 Italy Latvia 2 Lithuania 1 Luxembourg 2 9 Netherlands 5 Norway 1 Poland 1 2 Portugal 2 7 Spain Sweden 4 United Kingdom 1 19 Total By submitting their own correspondent banks as well as foreign branches and subsidiaries to the EURO1 / Directory, Participants can help increase the payment traffic they receive on behalf of these banks. reach: overview of directly and indirectly addressable banks Directly addressable 262 Indirectly addressable 2,093 main banks 93 BIC8 via s 182 sub-participants 44 BIC11 via s 2,887 EURO1 main banks 67 BIC8 via EURO1 s 1,911 EURO1 sub-participants 58 BIC11 via EURO1 s 18,876 Representing no. of BICs: 10,152 Representing no. of BICs: 21,763 Admission The Service is open to any bank or financial institution having its registered office or a branch in the EU and that is a Full Member or a User Member of the Euro ing Association. There is neither a minimum credit rating nor a minimum own funds requirement. Joining is possible on a monthly basis, respecting the below timeline: Admission process Expression of interest Info sessions at EBA CLEARING Application deadline IWS subscription test & training 6 to 8 weeks 3 weeks 2/3 weeks Legal documentation deadline Live date * All EURO1 / s and their respective Sub-Participants Status: May 2011

5 Contact For any additional information, please contact: Alan Taylor Director, EURO1 / Services a.taylor@abe-eba.eu Tel: Christine Roulin Manager, EURO / Services c.roulin@abe-eba.eu Tel: Tel: Fax: Avenue Louise 1050 Brussels clearing@abe-eba.eu As a contribution to preserving our natural resources, EBA CLEARING printed this leaflet on 100 percent recycled paper.