Introduction. SEPA Credit Transfers (SCT) Overview of the domestic formats

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1 Introduction This document provides an overview of all the country specific information you need to successfully implement your migration to SEPA in Switzerland. Intending to provide a global picture of the impact of SEPA on your organization, it will help you understand all the elements you need to take into account in order to migrate your payment activities. Switzerland, where the local currency is the Swiss Franc, is less impacted by the SEPA migration than the Euro countries. The main reason is that all the schemes in domestic currency are not in scope of SEPA, which concern only transactions in Euro. Furthermore, as the country is not part of EEA, the end-dates set by the European Authorities are not applicable. But the Swiss Payment Council will impose the global usage of XML ISO by SEPA Credit Transfers (SCT) Overview of the domestic formats Today Switzerland is supporting one domestic credit transfer file format which is the DTA format. If you are initiating SEPA credit transfers in domestic format, you will have to change your way of working by Q Indeed the current local scheme will be aligned, to the greatest extent possible, with the rules of the SEPA Credit Transfer Scheme. The IBAN will be used exclusively as the primary identification feature. The credit transfers will have to be transmitted using the ISO standard, which will replace all domestic formats. 1

2 Comparison of domestic and SEPA transfers properties It is important for you to understand the impact of switching from one scheme to another. In addition to using a new format, migrating to SEPA impacts your operational team and your beneficiaries. While choosing your migration approach, make sure you understand all the related impacts using the comparison table below. SCT SCT File Format DTA XML Does the local format allow SCT payments? Yes, if all requirements to a SCT are fulfilled (optional for domestic transactions, mandatory for cross-border). Book date / Value date Debit: D Credit: Settlement date D: Execution date set in the credit transfer Debit: D Credit: Implementing the PAIN.001 PAIN.001 is the XML standard used for communications between the debtor/initiator and their bank. In addition to considering the format provided by the EPC, two specific points must be taken into account: Choosing the correct version PAIN.001 currently exists in 3 versions. A company starting its migration today should implement the last version PAIN as indicated in the Rulebook 6 (downloadable from the EPC website). Local specificities regarding the PAIN.001 Swiss specific guidelines and documentations can be found on 2

3 SEPA Direct Debits (SDD) Overview of the domestic formats Direct debit is not a heavily used mean of payment in the Swiss market, as Swiss debtors are reticent to give a direct debit authorization. However Switzerland offers already a domestic direct debit format: the LSV, which supports both EUR and CHF, and will remain supported for domestic direct debit in Swiss Francs. But SDD opens a new opportunity for Swiss creditors, to collect Euro from the entire SEPA zone. As decided by the Swiss Payment Council, the current schemes, standards and formats will no longer be supported for direct debits as of the 4th quarter of Comparison of domestic and SEPA direct debits Regarding direct debits, it is particularly important to understand the consequences of switching from one scheme to another. In addition to using a new format, migrating to SEPA also impacts your operational team, and above all your customers. This is why, while designing your migration approach, you must make sure you understand all the related impacts using the comparison table below. LSV+ BDD (B2B) SDD Core SDD B2B Format LSV LSV XML XML Does the local format allow SDD collections? No, local format does not contain all necessary data to allow SDD. Cfr New mandatory mandate information in SDD collections No, local format does not contain all necessary data to allow SDD. Cfr New mandatory mandate information in SDD collections Frequency Recurrent /One-Off Recurrent / One-Off Recurrent /One-Off Recurrent /One-Off Eligible debtor All Business only All Business only* Collection sending date (D = payment due date) Mandate management D-2 D-2 D-5 (First / One-off) D-2 (Recurrent) D-1 (all) Debtor s Bank Debtor s Bank The creditor holds a paper version and manages the mandate and Archiving Refund right 30 days No refund right Unconditional refund right within 8 weeks following the date of debit. 13 months for an unauthorized transaction Pre- Authorization (the debtor s bank confirms the mandate with the debtor) Pre- Notification No preauthorization, since the mandate is managed by the debtor s bank No preauthorization, since the mandate is managed by the debtor s bank Not required n/a n/a Must be sent 14 days before payment date** No refund right for an authorized transaction. 13 months for an unauthorized transaction Debtor must confirm the mandate with his bank before first collection Must be sent 14 days before payment date** * In Switzerland, micro enterprises are seen as businesses and can therefore be declared debtors of B2B mandates. ** The pre-notification time can be reduced if agreed upon by both the debtor and the creditor. 3

4 New mandatory mandate information in SDD collections Generating SDD implies using certain mandatory data regarding the mandate, that were not necessary in the domestic format. In addition to managing all the XML collection constraints, this means you will probably need to adapt your IT and/or operational processes in order to collect, store and send the following information: IBAN : the accounts of both the creditor and of the debtor must be in IBAN format. Debtor s bank BIC: this information is mandatory until the 1 st February 2014 for domestic transactions and the 1 st February 2016 for cross-border transactions. If you encounter difficulties in enriching the BIC of your debtor s banks, BNP Paribas can provide a service for automatic enrichment. Mandate reference : Each mandate should be identified by an unique mandate reference. Date of signing: The date of signing of the original mandate must be mentioned in every collection. Implementation of the PAIN.008 (SDD Collection) Swiss banks agreed to follow the EPC standard recommendations, without any specifics. Please consult for further information. Mandate Migration It is not possible to migrate the current existing mandates in CHF. These mandates will remain valid and are not concerned by SEPA. Therefore, SDD will always require the signature of a new mandate. SEPA Creditor Identifier (CI) In order to use SEPA direct debit, the first administrative step you must take is getting a SEPA Creditor Identifier. This number will identify your company wherever you will be collecting within the SEPA zone. Note that you can request one SEPA CI for each of your business activities. How to get a SEPA Creditor Identifier? You can get your SEPA Creditor Identifier via your preferred bank. It can then be used in any SEPA country, for any scheme and whichever bank you will collect through. SEPA Creditor Identifier format Positions 1 and 2: The ISO national code for Switzerland (CH), Liechtenstein (LI) Positions 3 and 4 : Two-digit check digits (modulo 97-10) Positions 5 to 7: Creditor Business Code. This code can be freely determined by the creditor for the identification of a business field within the same company. If no Creditor Business Code is used, then ZZZ is used as a placeholder Positions 8 to 18: National identification number. Eleven-digit numerical national Creditor Identifier, which unambiguously identifies the creditor within Switzerland and Liechtenstein. It is numbered progressively beginning with 1 and filled in with leading zeroes. 4

5 Mandate information Types of mandate Switzerland mandates are currently only available in paper format. Mandate Template Switzerland proposes the usage of the standard EPC template, without specific. Conversion of BBAN to BIC + IBAN Conversion Service SIX Payment services offer the possibility to convert BBAN to IBAN. The structure of an IBAN In Switzerland, an IBAN contains 21 digits structured as follows: Digits 1 to 2 identify the country: CH. Digits 3 to 4 correspond to the standard IBAN check digit. Digits 5 to 9 identify the Swiss bank clearing number Digits 10 to 21 identify the account number Example: CH The structure of a BIC Digits 1 to 4 identify the institution: BPPB Digits 5 to 6 identify the country: CH Digits 7 to 8 identify the city: GG Digits 9 to 11 identify the branch: XXX 5