IBS Journal Supplement 2015
Swift and UK Payments Council gear up for the SEPA ‘IBAN Only’ mandate
The UK’s Payments Council is work- ing with Swift to create the SEPA IBAN Only (SEPA IO) directory for UK banks and financial institutions and to devel- op a platform for the banking com- munity to input and manage their BIC (Bank Identifier Code) and IBAN (International Bank Account Number) relationships. The project is a response to the
SEPA Regulation, namely Article 5(7), which mandates that payment ser- vice users (PSUs) can no longer be required by their payment service providers (PSPs) to provide the BIC when initiating a payment, explains Andrew Foulds, senior market man- ager at Swift. ‘However, the interbank payment routing mechanisms will still require BICs as a mandatory field,’ he adds. This applies both to domestic and cross-border SEPA payments, and PSPs will have to derive the BIC from the IBAN, hence ‘the need for a cen- tralised source to facilitate the deri- vation process while also supporting straight-through processing’, he says The cross-border part of the reg-
ulation will kick in for the Eurozone countries on 1st February 2016 (the domestic part has been in place since 1st February 2014). But since the UK is not a Eurozone country, its dead- line for the ‘IBAN Only’ mandate is deferred to 31st October 2016. ‘How- ever, from a practical perspective, the February date is of relevance since by then Eurozone PSPs will need to be able to derive the correct BIC from any given GB IBAN. Basically, if Euro- zone banks want to do business with UK banks, they will need to derive the correct BIC from their UK counterparts’ IBANs, so the UK market will need to be ready sooner rather than later.’ The Payments Council and Swift
will create a central data source for SEPA specific routing data, which will
‘If Eurozone banks want to do business with UK banks, they will need to derive the correct BIC from their UK counterparts’ IBANs, so the UK market will need to be
ready sooner rather than later.’ Andrew Foulds, Swift
facilitate the automated processing of SEPA payments. The UK banks will populate it with the relevant data, which will form the basis for the UK SEPA IO Directory. ‘The Payments Council has set a target of Novem- ber 2015 for the directory to be live,’ says Foulds. It will be available on a standalone basis as well as included in the SwiftRef reference data service from Swift. Swift landed this deal as a result
of a system selection carried out by the Payments Council in 2014. Around eleven hopefuls responded to the RFP,
including UK-based reference data vendors and multinational outsourc- ing companies. There was a due dil- igence process as well as providing a detailed proposal on the solution, recalls Foulds. Shortlisted vendors were then invited to present their offerings to the Payments Council, fol- lowed by the two finalists pitching to the UK bank representatives. The rec- ommendations of both the communi- ty and the Payments Council were put to the Payments Council board for a final decision, which came in Decem- ber 2014.
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© IBS Intelligence 2015
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round-up: who’s doing what
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