Transcript Colloque ENST

Success factors for building
a European Card Payment System
Yves RANDOUX
ENST « Economics of Payments Systems » Conference
Paris, 26 October 2007
1. Basic Conditions
• A payment system is the expression of the
SOVEREIGNTY of a State
• SOVEREIGNTY
–
–
–
–
can be limited or extensive
is based on the CONFIDENCE of its citizens
is structured by the State
is formalised through legal dispositions, established either
by the LAW or through CONTRACTS
• In most countries, the Central Bank plays the role
« GUARDIAN» of this CONFIDENCE
Quotes to illustrate the
different conceptual views (1)

« To create a single market in which all consumers and businesses can carry out
electronic payments throughout the European Union, …. at least as easily, quickly,
reliably, and securely as can currently be done within the most efficient payment
systems in Member States …. »

«Within the SEPA customers will be able to make payments
throughout the whole euro area using a single payment
account and a single card (as they do within their own country)»
« SEPA is the integrated market for payment services …
where there is no distinction between cross-border and
national payments within the euro-area … »

Quotes to illustrate the
different conceptual views (2)
« … to provide the market with an appropriate framework for
consolidation and incentives for integration of EU payment
systems »

« … enable European customers to use general purpose cards to
make payments and cash withdrawals in euro throughout the
SEPA area, which is defined as the area within the EU where
customers can make and receive payments in euro … »

«What is the SEPA ? … A double ambition :
- a fully integrated payment system for the Euro
Extensive modernisation (Lisbon agenda) »

2. Key Success Factors
in a Payment System(1)
Above everything else, …
… there is a need for a shared PROJECT which
integrates (at least) the following considerations :
– a) Technology and Security
– b) Organisation and Legal
– c) Economic and Financial
• without neglecting a very special ingredient : the
commitment of a maximum number of interested
parties to the success of the PROJECT ...
2. Key Success Factors
in a Payment System(2)
Above everything else, …
… there is a need for a shared PROJECT which integrates
(at least) the following considerations :
– a) Technology and Security
– b) Organisation and Legal
– c) Economic and Financial
• without neglecting a very special ingredient : the
commitment of a maximum number of interested parties to
the success of the PROJECT ...
Principle functional domains in a
Card Information System
EXCHANGE LAYER
Oppositions
Card Ranges &
Establishments
PLAGES
Enquiries &
Surveillance
ETABLISHMENTS
DAB/GAB
Fraud Prevention
Cash Withdrawals
1
BIN : Range of Card Numbers
3 Card numbers for which the signature has been copied
1
OPPOTOTA
2
LISTE VSD 3
C.H.N.
Exetended
stop list
4
Acceptors
Fraud Prevention
Payment
2
4
List of stopped card numbers
Non-standard Merchants
2. Key Success Factors
in a Payment System(3)
Above everything else, …
… there is a need for a shared PROJECT which integrates
(at least) the following considerations :
– a) Technology and Security
– b) Organisation and Legal
– c) Economic and Financial
• without neglecting a very special ingredient : the
commitment of a maximum number of interested parties to
the success of the PROJECT ...
The principal protocoles to be
standardised in a card system
Merchant Bank
Cardholder Bank
Clearing and Settlement
Network
ISO 8583 / XML
Authorisation Network
CAS
CAS
Card
ERIDANE
EMV co
CIR CWG
EPAS
Payment Terminal
or ATM
CIR TWG
Concluding Remarks
• Building a payment system is not something
which can be done with incantations or by waving
a magic wand.
• To succeed in the formidable challenge which
SEPA represents, the real objectives must be
clearly defined and managed as a project.
• and it must be done with the participation of
everyone concerned.