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SEPASEPA

Panel moderated by Anne DRIF (Les Echos)

with

Olivier BORNECQUE (AFTE)

Yannick CHAGNON (Société Générale)

Jean-François DENIS (BNPPARIBAS)

Gilbert LABBE (EDF)

Claude WARNET (Comité interministériel sur les moyensde paiement européen)

Association Française

des Trésoriers d’Entreprise

SEPASEPA

Single Euro Paiement Area

Or how to exchange euro payments

between Milan and Francfort

as easily as it is possible today

between Paris and Marseille,

under the same cost, the same instructions,

the same security level

and the same tracability.

SEPA : Next stepSEPA : Next step

1/1/1999 Euro, an accounting currency

1/1/2002 Euro, a paper currency

28/1/2008 – 2013 (?)

Euro, an integrated

euro payments market

SEPA : a large projectSEPA : a large project

Affects all economic players

Affects almost all departmentsin a company

5

Single Euro Payment Area:Background

Single Euro Payment Area:Background

The different components of the Project:

New payment methods:

SEPA Credit Transfer instead of mass wire transfers

SEPA Direct Debit instead of direct debit

A new pattern for Bank Card .

Legal context standardization with the European Payment ServicesDirective (PSD) adapted by each EU Member.

Electronic messages standardization based upon new technologies(XML) and ISO 20022 standard.

Creation of New clearing systems (PeACH: Pan European AutomaticClearing House) which allow moving from national to Europeanarrangements.

SEPA Payment MethodsSEPA Payment Methods

Common updates to both means of payment (SCT & SDD)

IBAN + BIC instead of former account identifier

Implementation of XML standard (ISO 20 022) and an additional detailsline of 140 lettering in order to help beneficiary identifying reason ofpayment.

Specficities of each mean of payment :

SCT

• Substitute only for mass wiretransfer

• No maximum limit• Maximum period for processing

the payment : 3 days(1 day in 2012)

SDD

• One time or standing order• Mandate managed by the creditor

instead of bank or debtor.• Rejection possibilities extended

to 13 months (Mandate default)

PlanningPlanning

SCT is available since January, 2008, all over the 32 SEPA countries

Unless specific agreement, SDD can be used since November 1st,2009. Novembre 1st, 2010 is the implementation deadline for banks.During a transition period domestic and SEPA payment methods willbe both available.

Substitution of domestic means of payment could be based upon« end-dates » currently discussed

SCT: end 2011 or end 2012?

SDD: end 2012 or end 2013?

Other kind of domestic payment methods (e.g. TIP in France) afterelaboration of substitute method + transition period

Some payment methods are out of the scope : cheques, bill ofexchange,…

Stakes for CorporatesStakes for Corporates

Considering means of payment concerned, impacts willbe different for each corporates sector

Two kind of Corporates will be highly concerned by SEPAchanging.

Multi National Corporates ( few flows but huge amounts) mostly affectedby SCT

Domestic Corporates issuing huge volume of flows of small amounts(Phone, water, energy providers, etc.) mostly affected by SDD

But all the companies will have to fit with new paymentmethods, because SEPA is a legal constraint anddomestic payment methods are going to be cancelled atthe end of the transition period.

Consequences for CorporatesConsequences for Corporates

Corporates have all informations required ( or almost …) in order toarrange the migration planning.

Key questions to ask:

What kind of impacts for Customer Relationship Management, or withsuppliers relationship, due to payment methods ?

Is company able to manage efficiently its Treasury position throughEuropean solutions ?

A unique SEPA project or a SEPA SCT project before a SEPA SDD project ?

Which actors involved and what kind of management for SEPA project(s) ?

…

Now SEPA project must run over Treasurers scope and turn intoreality for each company actor : CEO, IT Managers, PurchasingManager, Marketing Managers, etc.

SEPA prospectiveSEPA prospective

SCT

SCT consequences are positive despite main efforts to make forupgrading IT systems ( message standards, data bases, BIC/IBAN, etc.)

Benefits expected are related to cross-border transfers easier thanbefore all over EURO area and a better payments follow up.

Efficient yield management and financial costs reducing

SDD

SDD implementation requires more complex IT upgrades.

Main impacts are related to mandates management by creditor

Two essential characteristics are needed:

Easy implementation either for internal or external actors

Payment method security from customer point of view

Options for mandate management (paper or e-mandate) do not complywith those two aspects.

Benefits expected are less clear than SCT’s, although investments aremore important.

LT BenefitsLT Benefits

Considering that Europe is becoming the domestic area, the main stakes arecollection and payments management among SEPA area, according tocurrent conditions in France.

Positive vectors :

Formats standardization,

Harmonization of banks ways of communication (swiftnet),

Extending competition to an international level (Banks, payment servicesproviders) which should help finding more efficient and less expensiveclearing systems.

Development of adding value services

Migration to SEPA : EDF ExperienceMigration to SEPA : EDF Experience

SCT A positive situation…

A unique payment factory for all entities (BU and subsidiaries)payments (suppliers and third parties),

Payments issued froms Group Treasury accounts, therefore awholy monitored flow.

…an easy solution :

No requirement for BIC/Iban upgrading of upstreamapplications.,

Implementation of the Swift tool (BicPlusIban Directory) intopayment factory in order to generate BIC/IBAN.

Management by the payment factory of XML format andensuring compliance with SCT requirements (140 letteringadditional details).

Migration to SEPA : EDF ExperienceMigration to SEPA : EDF Experience

Benefits with SDD are less obvious EDF decided to integrate SEPA into awide project including collection factory review.

Mandate management takes a main part in that process (15 000/day)–Centralization + outsourcing,

Main impacts on IT factor system require anticipation about evolutions

At this point of the project, SDD implementation is expected for June 2011,

Change Management is a key point, considering the number of actors thatmay be aware compliance with the new process,

Risks analysis must be considered in order to integrate the risk of rejectionby consumers.

Thank you

Comité Interministériel sur les Moyens de Paiement Européens

Cash Management en zone EURO :La Révolution SEPACash Management en zone EURO :Cash Management en zone EURO :La RLa Réévolution SEPAvolution SEPA

Les administrations publiques sur le marchLes administrations publiques sur le marchéé desdespaiements :paiements :

Les volumes :- 45 % des virements : 250 M Etat & coll loc + 600 M sphère sociale- 15 % des prélèvements : 310 M Etat + 15 M sphère sociale

1



Les administrations publiques sur leLes administrations publiques sur lemarchmarchéé des paiements :des paiements :

Ce que cela représente en termes d’organisation :

Les acteurs :- l’Etat : central + déconcentré- les établissements publics et opérateurs- les collectivités territoriales- la sphère sociale

Les règles : des éléments d’unification (comptabilité publique,dépôts de fonds au Trésor, passage par la Banque de France) pourla sphère Etat

1



Le pilotage de la migration des administrationsLe pilotage de la migration des administrationspubliquespubliques

vers SEPAvers SEPA

La structure de pilotage :

- le Comité interministériel (CIMPE)- démarche coordonnée voulue par le 1er Ministre- structure légère, fonctionnant en mode pilotage de projet

- un pilotage décliné dans chaque sphère :- l’Etat : « sphère Bercy »- la sphère sociale et les hôpitaux publics

2



Le pilotage de la migration des administrationsLe pilotage de la migration des administrationspubliquespubliques

vers SEPAvers SEPA

Le tableau de marche assigné : respect du calendrier duComité national SEPA

- prêts pour le virement SEPA avant fin 2011

- prêts pour le prélèvement SEPA avant fin 2012

2



La montLa montéée en re en réégime de la migration des administrationsgime de la migration des administrationspubliques vers SEPApubliques vers SEPA

Le virement SEPA :- début des émissions en janvier 2010

- démarrage prudent au 1er trimestre : derniers réglages sur lestables de coordonnées bancaires et sur les volumes de fichiers

- émissions mensuelles de SCT : 3000 en mars, 180.000 en avril,2 M en mai, 6,5 M en juin, et avec l’acquis des déploiements actuels :10,5 M en décembre.

- - fin 2010 : au moins 80 % des virements de la sphère Etatsous forme de SCT : avancées substantielles de la sphère sociale

- (ex : 70 % des virements de la MSA)- fin 2011 : migration au virement achevée pour l’Etat et la sphère

sociale

3



La montLa montéée en re en réégime de la migration desgime de la migration desadministrations publiquesadministrations publiques

vers SEPAvers SEPA

Le prélèvement SEPA :

- en réception : les administrations se préparent pournovembre 2010

- en émission : souhait des administrations de disposerrapidement du mandat électronique

3



Merci de votre attention

3

SEPAStatus to date from the banks perspective

SEPAStatus to date from the banks perspective

23

SEPA CouncilSEPA Council

First meeting 7th June 2010

Chaired by ECB and European Commission

Objective: set the strategic directions of SEPAinvolving all project stakeholders, public authoritiesand representatives of the supply and demand side

Main discussion items :

• Perception of SEPA instruments and underlying reason formoderate take-up to date.

• End dates for migration to SEPA of legacy payment instruments

2 different end dates for SCT and SDD would be decided byECOFIN in second semester 2010, with the objective to translate it ina regulation in the course of 2011.

24

The SEPA program in FranceThe SEPA program in France

“Comité national SEPA” is a reference in Europe by bringing togetherthe different stakeholders

Latest interbank works, in particular related to SEPA DD 21 may 2010 : SDD migration guide of CFONB is published

Continuity of oppositions and mandate autorisation of legacy direct debit when migratingto SEPA direct debit

Other implementation guidelines already published• Interbank operation codification (“Codes opérations interbancaires”)

• Evolution of account statement to 120 characters for SEPA credit transfer and SEPAdirect debit transactions.

• Implementation guideline for the ISO 20022 standard for reporting

• Interbank standardisation for reject/return reason codes.

STET does support SEPA CT since launch and will support SEPA DDas of 1st Nov 2010

Adherence of French banks to SEPA DD Core rulebook : ongoing

CAI / VAI : for creation and validation of account information(equivalent to DCD / DVD protocol in France) for SEPA DD : in studyphase

25

SEPA CT migration – observations to dateSEPA CT migration – observations to date

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

7,00%

8,00%

02-2008*

mai-08

août-08

nov-08

févr-09

mai-09

août-09

nov-09

févr-10

Migration au SCT(zone euro)

Migration au SCT enFrance

Public administrations and State migration during 2010

Some large corporate did migrate

Attention point

• ETEBAC migration gets high priority for the enterprises

26

SEPA DD migration – observations to dateSEPA DD migration – observations to date

Volumes are low

Mainly B2B

Some enterprises use newfunctionalities offered bySEPA DD

• cross-border collection

• implementation of CollectionFactory

Opportunities Questions and attention points

• Concerns around reachabilityClient request : migrate when 100% of banksare reachableReject percentage

• Questions around mandatesprovide evidence of mandate validity Complexity of mandate management

• Questions and expectations around e-mandate

• Collection across the borders arepossible in the SEPA zone

• New options : one-off, B2B

• Rationalise (from technical levelup to treasury level possibly)

27

The SEPA implementation project at BNP ParibasThe SEPA implementation project at BNP Paribas

SEPA project implementation started Jan 2006, significantinvestments from front-end to back-offices systems

SEPA CT :

• Most Euro cross-border SEPA eligible payments processed throughSEPA

• Very significant domestic volumes as of 2009 continuing in 2010

SEPA DD :

• the platform is in production as of Nov 2009 (up to severalthousands/day), low volumes but enough to have build concrete “reallive” experience

Thanks for your attention

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