in Fr a nce Introduction

in Fr a nce Introduction This document provides an overview of all the country specific information you need to successfully implement your migration to SEPA in France. 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. France counts four means of payments that are in scope of the SEPA regulation: one credit transfer product called Virement and three types of direct debit: Prélèvement, Titre Interbancaire de Paiement and Téléréglement. REGULATORY UPDATE: ADDITIONAL TRANSITION PERIOD The European authorities agreed on allowing banks and other payment providers to process payments that differ from the SEPA format for an extra six months (amending EU Regulation N 260/2012). As a consequence, all parties (e.g. corporates, SMEs and Public Administrations) may continue to send payments and collections through non-xml formats until 1 st of August 2014. Each Member State has taken a position towards the application of this proposal. In France, legacy formats (such as CFONB) are accepted until 1 st August 2014. 1

SEPA Credit Transfers (SCT) Overview of the domestic formats Today France is supporting one single domestic credit transfer: the Virement, which is supported by the format CFONB160 (fixed file of 160 characters). If you are initiating credit transfers from French channels in CFBON160 format, you are impacted and you must change your way of working in order to produce SEPA compliant files before 1 st August 2014. 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. Does the local format allow SCT payments? Virement (CFONB160) No: - The accounts are mentioned in domestic format (RIB) and not in IBAN. SCT Missing information: - End2End reference File Format Plain text XML Book date / Value date Debit: D Credit: Standard: D+1 Settlement date Standard: D+1 D: Execution date set in the credit transfer Debit: D Credit: Standard: D+1 Standard: D+1 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.001.001.03 as indicated in the Rulebook 6 (downloadable from the EPC website). Local specificities regarding the PAIN.001 French banks agreed to follow the standard EPC recommendations, without any specificity. 2

SEPA Direct Debits (SDD) Overview of the domestic Formats Today, France is supporting three domestic direct debit formats. If you are currently initiating collections in France, identify which format you use and check how long it will continue to be supported according to the regulations. The validity of formats depend on which of the following three categories they fit in: - Phased out: in scope of the SEPA end date, the format remains accepted for an additional transition period. After this period, you must use another format. - Waived: Some formats are granted a waiver, making it possible to continue using them until 1 st February 2016. There are no waivers in France. - Part of a niche product : Member states can declare a niche product if a product has less than a 10% market share (based on ECB statistics). All niche products will remain valid until 1 st February 2016. Therefore, if you are using a waived format or a format supporting a niche product, the migration deadline for your direct debit system is 1 February 2016. Obviously, you can start migrating now. Product Description Validity SDD Continuity Prélèvement Main domestic direct debit product, Phased out. Remains Existing mandates based on the CFONB160 format accepted until the remain valid for SDD Prélèvement accéléré TIP Same as Prélèvement, but with shorter execution delay (2 days instead of 4) TIP is similar to the Prélèvement, except that the client must authorize every operation by signing and returning a paper that come with his invoice. 1 st August 2014 Phased out. Remains accepted until the 1 st August 2014 Part of a niche product The products are valid until the 1 st February 2016 Core Existing mandates remain valid for SDD Core Discussions are still ongoing regarding mandate continuity Téléréglement This format is used by a small set of specific entities only. Other variant, the Téléréglement requires the debtor to indicate to his bank, for each operation, the amount that will then be debited at due date by the creditor. Part of a niche product The products are supported until the 1 st February 2016 Discussions are still ongoing regarding mandate continuity Lettre de change relevée (LCR) Among other means of payments out of scope of SEPA, France has the Lettre de change relevée (LCR), a system quite similar to a direct debit. In this scheme, the creditor and the ultimate creditor are different persons, and the debtor has very few possibilities to obtain a refund. Even if this payment mean is out of scope of SEPA, it could be interesting for a company willing to harmonize his means of payment to replace LCRs by SEPA direct debits. 3

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. Prélèvement TIP Téléréglement SDD Core SDD B2B 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 Not aligned Not aligned Eligible debtor All All Business only All Business only* Collection sending date (D = payment due date) Standard: D-4 Accéléré: D-2 D-1 D-1 D-5 (First / Oneoff) D-2 (Recurrent) D-1 (all) Mandate management and Archiving Refund right Pre-Authorization (the debtor s bank confirms the mandate with the debtor) Partly by creditor, partly by debtor s bank. Usually, debtor s bank deals with any problem with debtor. Conditional refund right for Consumers within 8 weeks after the date of debit for an authorized transaction***. Professional users can agree on a shorter timeframe. 13 months for an unauthorized transaction Control made by debtor s bank Paper TIP managed by creditor Managed by creditor The creditor holds a paper version and manage the mandate None None Unconditional refund right within 8 weeks following the date of debit. 13 months for an unauthorized transaction No control of mandate by debtor s bank Pre-Notification Non applicable Non applicable Control made by debtor s bank Not required Non applicable Must be sent 14 days before payment date** * In France, 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. *** According to article 62 of the PSD. 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** 4

New mandatory mandate information in SDD collections Generating SDD implies using certain mandatory data regarding the mandate, that were not necessary in the CFONB160 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 included in the IBAN format (instead of RIB). Debtor s bank BIC: this information is mandatory until the 1 st of February 2014 for domestic transactions and the 1 st of 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. Date of signing: The date of signing of the original mandate must be mentioned in every collection. Implementation of the PAIN.008 (SDD Collection) French banks agreed to follow the EPC standard recommendations, without any specifics. Mandate Migration The Regulation N 260/2012, article 7 Validity of mandates and right to a refund, allows that existing mandates within a legacy direct debit scheme continue to be used within SEPA. Migrating a mandate means that you already have a domestic mandate authorizing you to debit the account of one of your customer and that you will continue using the same mandate, only with SEPA compliant collections. A mandate is considered as migrated when its first related collection in SEPA format has been successfully performed. One of the benefits of the migration is that you can continue to debit your customers with no need for them to re-sign a SEPA mandate. Note that a creditor have the choice to migrate gradually, and can continue using SDD and CFONB160 collections simultaneously for different mandates. To migrate your mandates, you should consider the two following major points: Schemes allowed for mandate continuity The current Prélèvement mandates can be migrated to SDD Core. All the B2B mandates will require a signature of a new mandate. Concerning TIP and Téléréglement, discussions are still ongoing to determine if a migration approach could be considered. 5

Migration rules France had a specific Original NNE tag to migrate mandates. It should be used by the creditor when his SEPA Creditor Identifier does not contain the NNE used in the original domestic mandate. This data is used by the debtor s bank in order to associate the migrated mandate to the previous mandate, allowing to check if the debtor has placed an opposition on to the creditor. French authorities recommend to start the Unique Mandate Reference by ++, which will indicate that it is a migrated mandate and therefore that the debtor s bank must analyse the tag containing the original NNE. In France, a migrated mandate must have a sequence type First. Therefore, it must be sent 5 days upfront the value date. 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? The French Central Bank (Banque de France) manages the SEPA CI register. Only Creditors with an account at a Payment Service Provider (PSP) in France may ask for a French creditor identifier. The request of such an identifier must be introduced by the creditor to his bank, that in his turn will make the request to the Banque de France. This creditor s bank must have an agreement for working in France including some French Overseas Collectivities (départements d'outre-mer... Please refer to the EPC country list EPC409-09). The ICS is transmitted by Banque de France to the requesting PSP which relays the information to the Creditor. When requesting a SEPA CI to his bank, the creditor must also give an extrait Kbis earlier than 3 months. This document can be requested to a greffe du tribunal de commerce (physically or online via infogreffe.fr). SEPA Creditor Identifier format The French format is the following: FR 12 ZZZ 123456 The first 2 characters indicate the country code: FR 3 rd and 4 th are the standard SEPA check digits. 5 th to 7 th indicate the creditor s business code (by default: ZZZ) The last 6 characters are composed of the NNE (Numéro National d Emetteur). Today, a company requesting a NNE in France will automatically receive a SEPA CI with its NNE. 6

Conversion of BBAN to BIC + IBAN Conversion Service A conversion service provided by BNP Paribas is available online: http://migrationsepa.bnpparibas.fr/webapp/calculette.do In case you need to convert a large database of accounts, your BNPP point of contact will be able to guide you to the best partners. How to build up the IBAN In France, the IBAN is composed of 27 digits with the following structure: FRkk BBBB BGGG GGCC CCCC CCCC CKK The first two digits identify the country of the account and are therefore always: FR. k: The next two digits correspond to the standard IBAN check digit. B: Positions 5 to 9 corresponds to the Code Banque G: Positions 10 to 14 correspond to the Code Guichet C: Positions 15 to 25 correspond to the RIB account number K: Last 2 positions being a check digit Example: FR14 2004 1010 0505 0001 3M02 606 How to build up the BIC The BIC cannot easily be deducted from the RIB, you need to use tables to map the RIB and the BIC code of the bank. It is easier to have this done for you by a specialist. Example: BNPAFRPP can be used for all French BNP Paribas accounts, but you can also use branch BIC codes in eleven positions. For BNP Paribas, you can use both, for some local banks you need to use the complete branch BIC codes in eleven positions. 7