Passer au e-SEPA

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SEPA migration is drawing to a close, but rather than marking the end of a chapter, it should be seen as a door opener for e-SEPA – the roll-out of online payment services based on the SEPA standards.

Society, and commerce with it, is moving online and banks should not miss that train. The internet has irreversibly changed the way we carry out our day-to-day business. Consumers in this technologically-charged age are becoming increasingly demanding on all fronts.  People want to be able to buy anything at any time and anywhere.  New m-payment offerings emerge to facilitate these purchases; money is being poured into “FinTech”, and the early adopters experiment with apps, wallets, widgets and tiles, often but not always tied to social media. Against this background, offering alternative payments is becoming a “must” rather than a “plus” for banks, as a corporate treasurer pointed out at a recent industry event in Luxembourg.

Responding to the need for Europe-wide online payment solutions

Positioning themselves in a market that is seeing many new entrants, new business models, accelerating IT innovation and newly emerging regulatory requirements presents banks with a number of challenges. But if they do not embrace the opportunities of e-SEPA now, they will put themselves at a serious competitive disadvantage and disappoint those of their customers who strongly believe that banks could offer a key to unlock new customer segments or markets, for instance by delivering solutions that support cross-border e-commerce. European e-merchants continue to call for a pan-European Online Banking e-Payments solution, which they believe could “significantly  reduce  costs  for  consumers and  retailers  associated  with  mitigating fraud  and  authentication  of  the  credit transaction,  thereby  increasing  reach  and conversion  for  retailers  at  a  fair  cost,”  as Ecommerce Europe argues in its position paper on e-payments launched at the association’s annual event in Barcelona on 16th June 2014.

By providing a way for consumers to pay for online purchases all across Europe from their bank account, banks (i.e. regulated payment service providers) can respond both to merchant expectations and to the need of consumers for a safe, real-time payment experience online. MyBank, a Europe-wide e-authorisation solution developed by EBA CLEARING, helps the bank offer this. MyBank uses existing infrastructure and, in a first instance, provides solutions built on the SEPA payment instruments. It enables safe digital payments and supports secure identity authentication through a consumer’s own online banking portal or mobile application.

MyBank for payments is live, enabling the initiation of SEPA Credit Transfers since March 2013. The solution is established and continually growing with over 140 banks across three European countries, more than 3,900 merchants and 12 million customers already reachable. Efforts are ongoing to put in place interoperability with existing national online banking-based solutions, which will widen the reach of MyBank and support these national communities in their cross-border transactions.

MyBank mandates will go live in October 2014, creating a bank-driven electronic mandate for SEPA Direct Debits.  This follows an intensive testing period which involved several European corporates and banks.  Further projects, such as a multi-currency solution and e-identity services, are in the pipeline and will take MyBank beyond SEPA payments.

 Combining ease of use with high security levels

Banking security is the core of MyBank. Being able to authenticate and authorise people by creating a direct link between a customer’s online bank account and the online business’s bank eliminates the need to collect and store personal data. Customer identity and confidential data are protected and the immediate authorisation of payments reduces the risk of fraud and charge-backs. With MyBank, trust and confidence in online transactions is increased both at the level of the seller and at the level of the buyer.

It is easy to use: consumers select the MyBank payment option from participating merchants, enter the name or BIC of their bank in a pop-up window and are immediately redirected to their own internet banking portal. After entering their regular log-on details, they are presented with a secure, pre-filled credit transfer or e-mandate containing all the relevant payment details to complete their transaction.

As the customers already have online or mobile banking, they do not need register or remember new passwords.

This combination of ease of use and high security levels helps merchants to unlock new customer segments: fifty percent of citizens do not shop online, and those that do could move more of their spending online. In seven out of 10 online shopping transactions, consumers abandon their virtual shopping cart during the check-out phase. Being faced with payment methods customers do not feel comfortable with, having to enter large amounts of personal data and being redirected to an unfamiliar site for the payment process all are among the top five reasons why they choose to do so.

First analyses by a large utility having implemented MyBank in late 2013 confirm that the MyBank adoption rates are especially high among customers who did not settle their bills via online payment methods before: 60 percent of the MyBank users had previously paid their bills in cash at the local post office while only 9 percent had previously used their cards.

Why banks should act

 Since it responds to major merchant and consumer needs, MyBank has the potential to put European banks and other payment service providers at the heart of the European digital economy.  It gives the banks a set of business rules and specifications as a basis for their mobile and internet strategy and allows them to roll out innovative online payment products to their customers. MyBank also creates new business opportunities, from reselling insurance to offering payment installments on large purchases. At the same time, it enables banks to cost-effectively leverage investments made in their online and mobile banking channels as well as in their SEPA infrastructure.

Most importantly, in this era where occupying space in the online world and keeping your customer engaged seem to supersede traditional business case calculations, MyBank helps banks to give customers what they want and to mitigate the threat that they will simply turn to other ways of paying and leave the banks with the expensive back-end and little space to manoeuver.

The MyBank Team – www.mybank.eu

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