The Euro Banking Association will launch on Monday a new system for cross-border retail payments processing. The EBA claims that Step1 will be the first pan-European system for low-value payments (amounts under E50,000) in the EU.
Step1 is to be launched barely a week after the European Commssion launched a withering attack on the banking industry's failure to lower the cost of cross-border payments transfer. A recent Commission study found the average fee for transferring E100 between member states was E17.10 and that one in twenty payments took longer than six days to arrive.
The Step1 system has been designed to provide its bank participants with a single cut-off time for retail payments to all EU countries and simplified liquidity management and reconciliation procedures. The system has been specifically designed to enhance automation and straight-through-processing (STP) of payment orders within the banks, says the EBA.
The new system is based on the Euro1 large value payment system, which interbank messaging firm Swift developed for the EBA.
In addition to the 70 Euro1 member banks, the EBA has signed up 23 new banks to join Step1 from start of operations. The next enlargement round is scheduled for early March 2001. The Association says it has already registered the interest of more banks to join in the second round.