They include: a model for migration away from national domestic ACHs; a multi-purpose direct debit service; changes to Euro1/Step1 to enable aggregation of a financial group's position across subsidiaries; and a priority payments scheme.

As EBA Clearing looks to establish itself as the most credible pan-European automated clearing house (PE-ACH) and Sepa enabler, it is encouraging banks across the region to consider moving domestic credit transfers to Step2, which they already use for cross-border transfers.




Giorgio Ferrero at Sibos 2005

Luxembourg banks are expected to decide this month whether they will move domestic credits onto the platform. If they do, they are likely to be the first to complete the task. Italy was the first country to announce its intentions when seven EBA member banks announced in April that they plan to start using Step2 domestically by the second quarter of 2006.

But the implementation time for Luxembourg would be much shorter as the country already uses the formats required by the EBA's cross-border platform for its domestic payments.

Spain is expected to announce a migration timeframe early next year, and Giorgio Ferrero, chairman of the EBA Clearing Company, says Finland is also actively considering the move.

The EBA is recommending a 'concentric model' that follows a phased, organised approach to Sepa compliance. It recommends national communities work with the EBA on the addition of core domestic credit transfer functionality first, with later addition of best-of-breed functionality taken from ACHs across the region.

Extending its vision further, the EBA has announced its intention to launch a new multi-purpose, pan-European direct debit offering that would build on the benefits of Step2 in the Sepa environment. It is currently working on the rule book, and hopes to have 15 to 20 banks involved in a pilot programme around the beginning of 2007, with a view to live use from 2008.

In another enhancement to its European platform the Association is looking to introduce a priority payment scheme that is similar to those in place in some individual countries. Under the scheme - which still needs to be framed as a master agreement and circulated - urgent payments that are instructed before mid day would have to be turned around no later than 4pm that same day. James Barclay, product development at EBA Clearing, stresses that the scheme would enail no additional system investment, but would require commitment and some changes in processes and management.

For its Euro1/Step1 platform the Association has also made changes to the way it handles groups and subsidiary companies, and tweaked its settlement processes. Among other benefits, it claims these changes will help banking groups achieve an aggregated group position and more effective netting.