EBA CLEARING's pan-European ACH currently has two processing sites, which provide full resilience in line with the principles applicable to Prominently Important Retail Payment Systems. In view of the SEPA migration end-date and the expected growth in SEPA payment volumes, the Board of EBA CLEARING has decided to implement an important capacity increase program combined with enhanced resilience, notably through the creation of a third processing site.

The creation of a third processing site is as well in line with the objective to apply the business continuity requirements laid down in the recently published CPSS-IOSCO Principles for Financial Market Infrastructures. Accordingly, the third site will be located in another country and more than 400km away from the primary sites in Milan in order to avoid the risk of all three sites being affected by the same natural disaster or any other major impact. The new site is to be delivered by the end of 2013, ahead of the SEPA migration end-date (1st February 2014).

The evaluation of the different implementation options and the final conceptual design of the third site have been elaborated in close consultation with Fraunhofer IAO (Fraunhofer-Institut für Arbeitswirtschaft und Organisation). The implementation of the third site will take place in co-operation with SIA, the technical operator of STEP2, and IBM. It was agreed to use as a technical platform IBM processing facilities available for that purpose. It is further envisaged to assign a dedicated operations team to the third site and to ensure that processing can be run from either site. In order to ensure effectiveness of the enhanced resilience, it is planned that the primary and back-up sites will periodically switch.

With this approach, EBA CLEARING has opted for the most efficient and riskfree way to deliver this third site in time for the SEPA migration end-date while observing user expectations for state-of-the-art resilience of a critical infrastructure for retail payments in Europe.

The delivery of the third site will ready the platform for onboarding a substantial part of the large domestic volumes that will migrate to the SEPA formats and channels over the next 14 months. Independent of the implementation of the third site, the enhanced processing speed and capacity of the platform will allow the processing of up to 500 million SEPA Credit Transfers and SEPA Direct Debits within a day - including the efficient handling of R-messages - by March 2013. STEP2 will thus be ready for the steep ramp-up in volumes expected in the run-up to the SEPA migration end-date.

"STEP2 is a well-proven pan-European retail payment platform with direct settlement in TARGET2 and is best-positioned to meet the need of banks and banking communities across SEPA for a highly efficient ACH infrastructure. In line with our responsibility for the systemic importance of the platform, we are fully committed to providing the highest level of technical and operational resilience for this key euro retail payment system," said Gilbert Lichter, Chief Executive Officer, EBA CLEARING.

"SIA provides a wide and complete range of payment services to its clients in 40 countries. For STEP2, we've designed and developed a high-resilience pan- European platform and we keep supporting it with our long-standing expertise. The implementation of the third site reaffirms our full commitment to ensuring the top-level resilience of this critical infrastructure and the required capacity for processing very large domestic volumes of transactions," said Massimo Arrighetti, Chief Executive Officer, SIA.

"IBM has deep knowledge of and enjoys a strong reputation for providing highly resilient and performing IT solutions and technologies for critical financial services functionalities and market infrastructures. We are working with the leading financial services institutions around the world in order to support business-critical applications and processes. Our technology and expertise have had a proven record in the financial services industry for decades and we are committed to contributing to the success of the STEP2 initiative as a key euro retail payment platform," said Ulrich Wolf, Vice President Banking and Financial Markets, IBM Europe.

STEP2 is a cornerstone of the SEPA processing infrastructure, providing full reach to banks across the 32 countries of the Single Euro Payments Area. At present, roughly a third of the SEPA Credit Transfers and over 80 percent of the SEPA Direct Debits channelled through ACH infrastructures are sent through STEP2 and distributed to over 4,700 reachable banks.