EBA and VocaLink reach out

     

Liz Oakes outlines VocaLink’s strategy on reach and interoperability with the EBA

The introduction of SEPA means that every bank signing an adherence agreement must be able to deliver a payment to any other bank within the 31 countries of SEPA.

A bank will therefore need to know what clearings the beneficiary’s bank participates in and how you can most effectively reach the bank via a CSM or corresponding relationship.  Taking this a step further, you would also want to establish which are the fastest, cheapest most reliable routes and which ones carry the extra information you wish to support to deliver value-added services.

VocaLink’s proposition follows a number of strategies to deliver a single solution for all SEPA transactions the bank needs to send and receive, including bilateral flows.

VocaLink and the EBA:

VocaLink will work with the EBA Step 2 platform to deliver reach from 1 January 2008.  The agreement between VocaLink and the EBA means that participants in the VocaLink Euro CSM will, as a result of the tie-up, become by definition, indirect participants of the EBA capable of delivering payments to EBA direct or indirect participants.  Commenting on the agreement, Martin Wilson, chief marketing officer, VocaLink said, “We are delighted to have reached this agreement and we look forward to a partnership which will deliver genuine value for banks and their customers.  It is very important for VocaLink and EBA Clearing to be able to guarantee the widest possible reach for their customers.  The development of connectivity between VocaLink and EBA Clearing is now a top priority to ensure that everything will be in place well in advance of 1 January 2008.”  Gilbert Lichter, chief executive of EBA Clearing, agreed “It is clear that the realisation of SEPA will be enabled by key players in the market like VocaLink and EBA working together to provide best value services and the widest reach possible.”

Reach banks:

VocaLink will use other methods to achieve reach across the 31 countries including using a bank, or specifically a number of banks that have existing reach and settlement capability within their local clearings.  This goes back to a framework banks are familiar with, whether we call it correspondent or network banking.  At VocaLink we call these banks “reach banks”.  Reach banks will deliver payments either directly via their bilateral arrangements to a local bank or via their local CSM under SLA’s with VocaLink on behalf of our member banks.

Interoperability with other CSMs:

VocaLink is a member of the European Automated Clearing House Association and is actively engaged in developing a technical interoperability framework to define messaging, settlement procedures and other elements necessary to ensure interoperability between banks, banks and CSMs, and between two CSMs.  This framework will be fully compliant with the rules and standards developed by the EPC.  VocaLink shares EACHA’s belief that interoperability is important in developing a competitive market for payments processing in SEPA.

EACHA has no commercial role.  Interoperability will be agreed bilaterally between CSMs, whilst adhering to the EACHA Interoperability Framework.  This requires a significant investment of time working with each CSM on an individual basis and at a practical level is likely to result in limited interoperability on 1 January 2008.

VocaLink’s strategy will enable us to achieve a competitive price and deliver an enhanced service to both member banks and their corporate and financial institution customers, and we will be ready with our first users on 1 January 2008.