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SWIFTSolutions for low value payment clearing systems. Slide 1. Sibos205_Banking_PC_LVACH_v2.ppt. Low-value payments. Usually low to medium value and / or non-urgent payments and related statement reports Credit transfers Salaries, pension payments, retail and commercial payments

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slide1

SWIFTSolutions for low value payment clearing systems

Slide 1

Sibos205_Banking_PC_LVACH_v2.ppt

Sibos205_Banking_PC_LVACH_v2.ppt

low value payments
Low-value payments
  • Usually low to medium value and / or non-urgent payments and related statement reports
    • Credit transfers Salaries, pension payments, retail and commercial payments
    • Direct debits
    • Cheque clearing and truncation
  • Formatted in a variety of file structures
  • Exchanged in electronic files
  • Cleared through correspondent relationships and/or Automated Clearing Houses (ACHs)

Sibos205_Banking_PC_LVACH_v2.ppt

complementing our position in wholesale segment by extending to low value payment market
Complementing our position in wholesale segment by extending to low value payment market

High-valuemessaging

Low volume

messaging

We started in the wholesale cross-border payments market : high-value messaging but limited volume

1973

Single and cross-border payments

We extended to the wholesale domestic payments (RTGS) : high-value add messaging with large volumes

1995

Domestic payments (RTGS)

We entered the retail cross-border payments market: lower-valueadd messaging but limited volume

2003

Bulk cross-border payments

ACH

2005

We are entering the retail domestic payments market: lower value add messaging but large volumes

Cards & cash

Low valuemessaging

High-volumemessaging

Sibos205_Banking_PC_LVACH_v2.ppt

swift provides a total solution for payments and settlement systems
SWIFT provides a total solution for payments and settlement systems

Banking correspondents

Automated clearing houses

Real-time gross settlement systems

Central securities depositories

Settlementinstructions

Settlement instructions

Payments

Settlement instructions

DVP instructions

R-t cash reporting

Real-time query/control

Real-time query/control

Real-time query/control

Bulk payments

Bulk payments

Reporting

Reporting

FIN FIN Copy InterAct FileAct

Sibos205_Banking_PC_LVACH_v2.ppt

lvp business models

Direct ACH participant

ACH

Indirect ACH participant

Payment data

Accounting data

LVP Business Models

1

3

“Hub and spoke” around ACHs

ACH acting as accounting

centre

e.g. NL, UK

e.g. ES, FR

2

4

Bilateral file exchanges

“Hub and spoke”

around ACHs

with indirect

membership

e.g. BE, EBA, ZA

e.g. AU, DE, IE

Sibos205_Banking_PC_LVACH_v2.ppt

market developments
Market developments
  • In Developing Markets:
    • Central bank led buy off shelf ACH’s in developing markets
  • In Europe:
    • ACH operator becoming more commercial
    • SEPA leading to consolidation
    • TARGET 2
    • Faster Payments (OFT)
    • Gradual move to XML, encouraged by Regulators
  • In US:
    • Increased interest in XML

Sibos205_Banking_PC_LVACH_v2.ppt

swift s solution for low value payment clearing systems
SWIFT’s solution for low-value payment clearing systems

Rationalisation

Standardising the communications layers with SWIFTNet FileAct embedding SWIFTNet PKI

Harmonisation

Standardising the end-to-end transaction chain with Bulk Payments standard for bank-to-bank and bank-to-ACH flows and C2B Payment Initiation standard for customer-to-bank flows

Sibos205_Banking_PC_LVACH_v2.ppt

the solution aims to connect all potential players involved in the end to end transactions
The solution aims to connect all potential players involved in the end-to-end transactions

Region with an ACH

RegionalACH

EBASTEP2

Countrywith an ACH

Countrywithout an ACH

NationalACH

Bank-ownedservices

International bank-to-bank exchanges and clubs

SWIFTNet services

Sibos205_Banking_PC_LVACH_v2.ppt

swiftnet solution for eba step2 pan european ach
SWIFTNet solution for EBA STEP2 -Pan-European ACH
  • EBA Clearing acting as service provider:
    • Administers its own SWIFTNet service for the STEP2 community
    • Uses SWIFTNet FileAct in many-to-one for payments input and output flows
    • Uses the MT103 and the XML Bulk Credit Transfer messages
    • Uses SWIFTNet Browse for on-line monitoring services
    • Uses Reverse Billing in order to let SWIFT invoice input traffic to senders; output traffic to receivers
  • To-date, 70 direct participants access STEP2 over SWIFTNet. More will join in November 2004 and later
  • See http://www.abe.org for more info

EBA

STEP2

Direct Participant

SWIFTNet solution

for EBA STEP2

SWIFTNet FileAct,InterAct and Browse

Sibos205_Banking_PC_LVACH_v2.ppt

what the first swiftnet based automated clearing house says
What the first SWIFTNet-basedAutomated Clearing House says

"Combining the strengths of our partners SIA and SWIFT, we have been able to launch our new pan-European retail payment clearing house (STEP2) within a record timescale of 10 months. With STEP2 in place, banks in Europe now have a new platform that enables them to further develop their retail payments business in accordance with customer needs in the Single Euro Payments Area. Using SWIFTNet was an obvious choice to allow for open access by a very large number of banks.”

Gilbert Lichter, Secretary General of EBA

Sibos205_Banking_PC_LVACH_v2.ppt

caja madrid s implementation of xml bulk credit transfer for eba step2

SWIFTAlliance

Gateway

SWIFTNet

FTA

Caja Madrid’s implementation of XML Bulk Credit Transfer for EBA STEP2

XML Bulk Credit Transfer STP Plus

EBA

STEP2

Application

Caja Madrid has implemented the Bank-to-bank Bulk Credit Transfer message STP Plus variant and originates the STEP2 bulk payments files straight from the internal back-office application

Sibos205_Banking_PC_LVACH_v2.ppt

what our customers say
What our customers say…

“We have given our preference to the XML bulk payment standard for STEP2 since XML is now our standard internal content management technology. Loading the XML schema into our back-office application enables us to avoid the development costs that a proprietary syntax requires.”

Caja Madrid

Sibos205_Banking_PC_LVACH_v2.ppt

by using swiftnet eurogiro members can eliminate their eurogiro proprietary link

Eurogiro

Hub

Eurogiro proprietary network

SWIFTNet

Eurogiro

Member

Eurogiro

Member

By using SWIFTNet, Eurogiro Members can eliminate their Eurogiro proprietary link

New

Eurogiro Members can use their SWIFTNet connectivity to exchange Eurogiro payments with other members. The Eurogiro Hub interfaces Eurogiro’s proprietary network with SWIFTNet.

Sibos205_Banking_PC_LVACH_v2.ppt

what our customers say1
What our customers say…

“The co-operation agreement with SWIFT fits perfectly with our strategy to lower entry and transaction costs and to expand the Eurogiro offering.”

Henrik Parl, Managing Director, Eurogiro A/S

Sibos205_Banking_PC_LVACH_v2.ppt

swiftstandards xml for end to end bulk payments enables end to end stp
SWIFTStandards XML for end-to-end bulk payments enables end-to-end STP

AutomatedClearingHouse

Ordering Customer’s

Financial

Institution

Beneficiary

Customer’sFinancial

Institution

XML Inter-bank Bulk Payments

2

XML Cash Management

4

5

3

XML Payment

Initiation

XML Cash

XML Cash

Management

Management

1

  • Standardised content
  • End-to-end STP

Ordering

Customer

Beneficiary

Customer

Sibos205_Banking_PC_LVACH_v2.ppt

swiftnet solution for fedach epn ach and us banks

Federal Reserve

TCH

FedWire

CHIPS

Clients

FedWire

FedACH

CHIPS

EPNACH

InterAct

Dedicated link(s)

Dedicated link(s)

Bulk payments / Files

FileAct

SWIFTNet

FedACH

EPNACH

Clients

FI’s &ACHs

SWIFTNet solution for FedACH & EPN ACH and US banks

Single payments / Messages

FI’s &RTGS

FIN

USBanks

Single SWIFTNet connection

Existing SWIFT flows (FIN)

New SWIFT flows (InterAct and FileAct)

Sibos205_Banking_PC_LVACH_v2.ppt

benefits for automated clearing houses

software

lines

maintenance

hardware

support

project management

testing

backup

legal

procurement

software

maintenance

release qualification

disaster take-over

exercises

education

documentation

Benefits for Automated Clearing Houses

Slide 17

Sibos205_Banking_PC_LVACH_v2.ppt

Sibos205_Banking_PC_LVACH_v2.ppt