The project of EBA Clearing was underwritten at the beginning of 2006 by fifty-nine major payment banks in Europe. The 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.

M-PEDD, which is planned to go live in mid-2007, will enable the European banks to offer their customers SEPA direct debits ahead of the EU Commission's deadline of 1st January 2008. When the banks roll out this new SEPA instrument to their customers, 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.

M-PEDD will enable national banking communities to have all their credit and debit transfers handled by one single pan-European platform. By integrating the key features of their domestic direct debit service on the STEP2 platform, EBA Clearing together with SIA will ensure that these communities can continue to maintain the same offerings and service levels for their customers during the phase-out period of their national payment instruments until the market's full adoption of SEPA instruments. Both the Luxembourg community and the major Italian banks have already committed to migrating their national retail credit transfers to STEP2.

The service will be based on EBA Clearing's STEP2 platform, the pan-European ACH that today processes SEPA-compliant credit transfers and has started to be increasingly used for domestic traffic. The platform was designed and built by SIA, which won EBA's bid on May 24th, 2002 thanks to its state-of-the-art technology, solutions and services. At that time many among the financial community looked ahead to the important objective of providing European banks, by mid-2003, with a pan-European ACH to process cross-border and domestic bulk payments at levels which will be comparable to those of existing domestic ACHs.

M-PEDD is characterised by the following:

• a central system, validating payments to achieve maximum straight-through processing (STP)
• ISO20022 XML messages for standardised data exchange
• a comprehensive referencing framework to allow payments to be reconciled with orders
• a network architecture based on standard SWIFTNet banking interfaces

The new service on the STEP2 platform is open to all banks operating in Europe. STEP2 today is able to distribute credit transfers to nearly every bank in all EU countries and Norway. With this successful pick-up of the new service by the major banks, EBA Clearing expects to achieve a similar reach for direct debit payments throughout Europe.

The M-PEDD will be able also to accommodate national characteristics, in a concentric model approach: its initial design will allow it to be extended to support Domestic Debit features or to support advanced features such as Electronic Bill Presentment and Payments. This extendible and flexible nature of the service has led to its name: "Multi-purpose Pan-European Direct Debit Service" or M-PEDD.

Renzo Vanetti, CEO of SIA, noted that "It was an honour for SIA to be chosen by EBA Clearing four years ago for the STEP2 platform. Today, we are proud to renew our partnership and further approach the full realisation of SEPA. It is an important goal, which will benefit banks, enterprises and citizens not only at economic level but in terms of European integration. The technological platform that we are completing will be the basis upon which to realise further services, in line with the EU directives and the market requirements."

Gilbert Lichter, CEO of EBA Clearing said "EBA and SIA have been frontrunners in the migration to SEPA through the creation of the first pan-European ACH, STEP2, just like the Italian banks are frontrunners in migrating their domestic traffic to STEP2. With the development of the first SEPA-compliant direct debit service, SIA and EBA CLEARING are again frontrunners and I am convinced that this will be another important success for us."