Fifty-nine payment banks in Europe have agreed to underwrite the project of EBA CLEARING to develop an infrastructure for processing pan-European direct debits. The participating banks include institutions from 15 European Union member states and represent the full spectrum of interest of the private, cooperative and the savings bank sectors.
The service is planned to go live in mid-2007 and will enable the banks to offer their customers direct debit services ahead of the creation of the Single Euro Payments Area (SEPA) on January 1, 2008, meaning that half a billion EU citizens will be able to purchase goods and services using the same direct debit product irrespective of their location.
The service will support (but not be limited to) the SEPA direct debit scheme created by the European Payments Council. Its initial design will allow it to be extended to support domestic debit features or to support advanced features such as electronic billing and payments. The extendible nature of this service has led to its name of the “Multi-purpose Pan-European Direct Debit service”, or M-PEDD.
The service will be based on EBA CLEARING’s STEP2 platform, the pan-European ACH that now processes SEPA-compliant credit transfers and has started to be increasingly used for domestic traffic. The platform will be based on a central system that validates payments with straight-through processing. Messaging will be in ISO20022 XML format and over a network based on standard SWIFTNet interfaces.