Boosting Cross Border E- and M-Commerce with Online SEPA Credit Transfers and Direct Debit Mandates

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1 Boosting Cross Border E- and M-Commerce with Online SEPA Credit Transfers and Direct Debit Mandates Cyril Dougier Head of Business Development

2 MyBank: Create Value around SEPA A single solution for real time access to account services A strong legitimacy Covering all of Europe Working with European banks and PSP in a collaborative manner Multi services: E and Mpayments / E mandates / E-ID A solution developed by EBA CLEARING, the leading pan-european payment infrastructure and settlement provider

3 European E-commerce is successful, but can we do better?

4 Crossborder / B2B Online Commerce: An unreachable Market? Only 37% of businesses buy online Eurobarometer 358 June 2013 Only 15% of internet users do online crossborder purchases

5 The Challenges of Online Payments

6 Do Cards fit for all? Low value transactions User experience Mobile payments Safety High value transactions Spending limits Lost buisness due to Fraud management rules High risk merchants Cross border transactions Trust in third parties Direct losses due to Fraud / CB risks / Scheme penalties Recurring transactions User experience Fraud management Expiry dates B2B Payment Card equipement rate Spending limit Ad valorem costs Low fixed costs User experience Ad valorem Costs Lost buisness due to Fraud management rules Risk of non payment Payer authentication Are wallets the solution? Yes but Cost Confusion / Reach Client recruitment

7 Regulation: Security vs. Conversion The EBA guidelines dated 19th Dec 2014 will come into effect on August 1st 2015 Cover mandatory rules for payment initiation when used over the internet. Apply to e-mandates, e-wallets and cards Apply to all PSP Mandatory strong authentication for all online payments 3DS with a One Time Passord becomes mandatory End of One Click payment? IMPACT ON THE CONVERSION RATE

8 Boosting E-Commerce with Online Credit Transfers (SCT) and E-Mandates (SDD)

9 SCT and SDD for Online Payments? Validate a credit transfer or a mandate for direct debits, in real time, from one s own bank account

10 The Success of Credit Transfers for Online Payments ideal's achievements in 9 years: More than 180 million transactions per year (+26% growth) 53% of E commerce payments in Holland TOP 5 brand The Netherlands is the country with the lowest E-commerce transaction cost (source: Emota) Countries with an online Credit Transfer solution

11 SCT unlocks digital Payment Barriers Simplicity for Buyers Simplicity for Merchants Safety and Trust Cost effective No registration No access to sensitive date: no PCI No sensitive data shared with third parties Low costs Familiar environment Real time Operation takes place within client bank infrastructure No fraud No chargebacks Omni-channel Easy implementation / reconciliation / refund process Can I trust the merchant? is out of scope No interchange

12 Airlines Use Case Airline payment challenges Fraud: 1% of volume High value transaction Refunds Settlement delay Online SCT No fraud No spending limit Easy and reliable refund Certainty of payment D+1 settlement

13 E-Mandates: The Flexibility of Direct Debits for Online Payments Bringing flexibility to payments When How much How many times For how long A seamless payment experience Real time validation One click payment Reliability of E-mandates with debtor bank validation No fraud As strong as a paper mandate

14 Conclusion

15 34 countries, Create 500 million value citizens, on 25 million SEPA corporates and SMEs and 9000 banks sharing a single payment experience Facilitate cross border commerce within Europe Secure transactions: An SCT is irrevocable Reduce payment transaction costs 122 billion euros saved per year. 100 million euros saved in the Ecommerce industry only. Source : Euractiv, June 2013 Use of the SEPA mark is under license from the European Payments Council.

16 Out of 100 European internet users only 47 buy online domestically 15 buy online cross border 37 buy online for B2B Eradication of the barriers to cross border ecommerce #no fraud #no chargeback #no spending limit #single experience all across Europe Real time online payment from the bank account #credit transfer #e-mandate validation #e-id services #6 countries #300 banks #30 million buyers reachable And more to come An initiative by #EBA Clearing, the European Clearing house, owned by the major European banks