Fifty-nine major payment banks in Europe have agreed to underwrite an EBA Clearing project to develop an infrastructure for processing pan-European direct debits.
The new system 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 1 January 2008. Once implemented, says the EBA, up to half a billion EU citizens will be able to purchase goods and services using the same direct debit product irrespective of their location.
Dubbed, 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 today processes Sepa-compliant credit transfers.
With the M-PEDD development phase starting in February 2006, the banks aim to have the service live in time for the industry’s deadline of 2008 for pan-European direct debits.
The system has been designed so that it may ultimately be adapted and extended to support domestic debit features or other payments options such as electronic bill presentment and payments.
The 59 participating banks include institutions from 15 EU Member States and represent the full spectrum of interest of the private, cooperative and the savings bank sectors.