In a significant step towards setting up a competitive infrastructure for the Single Euro Payments Area (SEPA), SWIFT has agreed with EBA CLEARING that the STEP2 community will benefit from the new SWIFTNet Bulk Payments pricing as of 19th of June. The new pricing per payment allows STEP2 participants to exchange low-value payments with the STEP2 service at a price varying between 0.07 and 0.02 eurocents per payment unit.

The new pricing will go into effect on 1 October 2008. EBA CLEARING will adopt the Bulk Payments solution before 1 October 2008, and all members of the STEP2 community are expected to comply with the technical requirements of Bulk Payments by the latest on 1 October 2009. This agreement means that, as of October 2008, STEP2 participants will benefit from the cost effectiveness of the Bulk Payments pricing scheme, which will result in an 80% cost reduction for the STEP2 community as a whole.

Benefits of Bulk Payments
With the Bulk Payments solution, SWIFT allows financial institutions to use the same SWIFTNet infrastructure to send retail payments in bulk files to the clearing and settlement mechanism of their choice, whether it is an automated clearing house or another financial institution.

Bulk Payments and SEPA
SWIFT has adapted its pricing model to conform to the SEPA environment where there is no distinction between domestic and cross-border payments and where the benefits of scale can be shared throughout the community. Bulk Payments proposes a competitive pricing per payment, including a tier-based approach. The pricing is independent of the standards being used, guaranteeing low and predictable traffic costs on SWIFTNet, as payment flows will gradually move from domestic to SEPA standards.

In addition, the solution, based on the FileAct messaging platform and common market practices, guarantees the required interoperability between low-value payments communities across SEPA. The FileAct messaging platform also includes the possibility of adding business information in the header of the file, and of copying this information to a third party for further processing or authorisation.

The agreement brings the deployment of Bulk Payments to the next level. Bulk Payments is already implemented by a number of major low-value payments communities across SEPA.

This agreement with the STEP2 community will also positively impact existing users, as the new infrastructure landscape provides them with new opportunities to leverage the investment made in the Bulk Payments solution, and considerably contributes to the harmonisation of the messaging platform – for the benefit of all existing and future users of Bulk Payments.

In line with this vision of harmonisation and coherence between low-value payments communities in SEPA, SWIFT has decided to review the end date of the migration period of the existing Bulk Payments communities (originally 1 July 2008) and will align it with the timeframe of the STEP2 community of 1 October 2009.

During the migration period, SWIFT will estimate the number of payments by dividing the total file size by an estimated average length of payment instruction. As of 1 October 2009, all Bulk Payments users will benefit from the Bulk Payments community pricing scheme, based on the number of payments documented in the FileAct file header.

19th June, Brussels, Belgium




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