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PSD2 Spring Update
| 18-06-2018 | François de Witte | TreasuryXL
During the fall of 2017, I published a Summer Update on PSD2. Since then, a lot of things have moved, and hence I found it the right moment to provide an update you on some developments PSD2 and open banking.
LIST OF ABBREVIATIONS USED IN THIS ARTICLE
AISP: Account Information Service Provider
API: Application Programming Interface
ASPSP: Account Servicing Payment Service Provider
EBA: European Banking Authority
PISP: Payment Initiation Service Provider
PSP: Payment Service Provider
PSU: Payment Service User
RTS: Regulatory Technical Standards
SCA: Strong Customer Authentication
TPP: Third Party Provider
Main updates on the regulatory framework
Several member states have experienced in the transposition of PSD2 in the national law. The current status (27/5/2018) is as follows:
• Full transposition measures communicated: Austria, Bulgaria, Cyprus, Czech Republik, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Slovakia, Slovenia, Sweden, United Kingdom
• Partial transposition measures communicated: Belgium, Lithuania, Malta, Poland
• No transposition measures communicated: Croatia, Latvia, Luxembourg, Netherlands, Portugal, Romania, Spain
Source : https://ec.europa.eu/info/publications/payment-services-directive-transposition-status_en
The EC has launched an infringement proceeding is against the states who did not or only partially transposed PSD2 in their national law.
The Regulatory Technical Standards on strong customer authentication and secure open standards of communication have been published on 13/3/2018 in the Official Journal of the European Union. They will apply in as from September 13, 2019, leaving 18 months to the payment industry to get ready for this new state of play.
The EBA has decided to maintain the obligation for the ASPSPs to offer at least one interface for AISPs and PISPs to access payment account information. As of 13/9/2019, the existing practice of third party access without identification (at times referred to as ‘screen scraping’) will no longer be allowed. In order to address the concerns raised by a few respondents, the final RTS now also require that ASPSPs that use a dedicated interface will have to provide the same level of availability and performance as the interface offered to, and used by, their own customers, provide the same level of contingency measures in case of unplanned unavailability, and provide an immediate response to PISPs on whether or not the customer has funds available to make a payment.
The banks need already to prepare some steps as from early 2019 onwards. The following timetable illustrates the deadlines:
The finalization of the RTS is an important milestone which will give banks and TPPs much more clarity and certainty on how to push forward their PSD2 compliance and strategic programs.
13/1/2018, the date of implementation of PSD2 appeared to be nonevent. Over one third of the member states failed to implement PSD2. Only very few banks had published their APIs. We observe that banks are much slower in opening up their APIs to TPPs, and this for various reasons, e.g. APIs are not yet ready technically, chicken and egg situation with other banks, etc. As a result, the API aggregators need to use screen scraping or reverse engineering to enable to provide for the TPPs (including banks) access to the accounts held at the ASPSPs.
Furthermore, the standards are not yet harmonized throughout Europe. A number of working groups were constituted to further elaborate on these standards, the most important ones being the UK’s Open Banking Working Group (OBWG), the Berlin Group, and STET. Experts seem to agree that the Berlin Group Standard is the most elaborate ones, as it incorporates the most relevant use cases and has been built with the latest technology standards using REST, OAuth2, JSON and HTTP-signature. It relies on ISO 20022 elements for structuring the data to be exchanged between TPPs and ASPSPs However the UK Open Banking standards also provide interesting insights. The UK has already a much larger experience in open banking. In my view it’s essential to create a set of common, industry standard APIs that can be used by all.
Another challenge is the implementation of the multi-factor authentication. There also some interesting initiatives took place. Gemalto the world leader in digital security, has enabled Belgian mobile ID scheme ITSME to enroll 350,000 users and securely process one million transactions per month for both private and public online services – making it one of the most successful mobile ID applications in Europe within one year of launch.
Real-time payments can be the catalyst for a new wave of innovative corporate banking, payments and cash management services. The SEPA Instant Credit Transfer, will offer in combination with PSD2 interesting new use cases for Open Banking. However, it will take time to take off, as it requires huge investment from the banks, and also a change in the mentality of the consumers.
Conclusion
Although PSD2 should have been enacted by the member states, some states are still lagging behind. The banks are slow in opening their APIs, and open banking is not taking off as quickly as expected. Market players need also to agree on common standards for the interfaces.
However, there the deadline of 13/9/2019 is approaching and there is no way back. The clock is ticking in the PSD race. “If you cannot beat them, then you better join them”.
Open banking is a new way of approaching the delivery of financial services for customers, and as such, it requires a new way of thinking and new ways of working. This will also require a new mindset and a different team set up. Teams are going to be more agile and have a mix of skills and people. This is a big challenge for several institutions.
For your information, I will give a one-day training on the subject at Febelfin Academy on 21/11/2018. For more information, please go to: https://www.febelfin-academy.be/nl/opleidingen/detail/psd2-and-the-open-banking-architecture-addressing-.
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What corporate treasury can learn from corporate insurance
15-06-2018 | Treasurer Search | TreasuryXL |
One of the many benefits of being a recruiter is that every meeting is a lecture of an expert about his professional life and developments. An excellent way to learn and keep up-to-date. Every second week I try to transfer this knowledge to my colleagues in Team Treasurer Search and the risk topic often gets attention. I also want to share my observations about insurance and treasury with you.
First, perhaps a bit cynical, why is corporate insurance reporting to the group treasurer more often? The importance and professional level of insurance is increasing, this is also acknowledged by CFOs. To prevent their span of control becoming too big, they delegate the profession to legal, procurement and recently often to treasury. Many treasurers are not motivated by insurance tasks and ignore the overlap that exists. Traditionally the risk types “market risk” and “liquidity risk” create primary tasks for treasury departments that often motivate the candidates I meet. Recently counterparty or credit risk gets a bigger role, not only with financial services companies. My recent conversations with corporate insurance managers brought me new insights in how risk can be analysed and managed.
In previous blogs I wrote that “new school treasurers” distinguish themselves by better connecting with their business partners and provide understandable solutions that make sales, operations and finance happy. Insurance managers were already forced to talk with the business their whole life. If an insurance manager does not understand what his business partners do, he will not be able to make a proper assessment of the risk. And that does include all types of risk: staff getting sick, goods not being supplied, tornados, computer viruses, politicians starting embargos, etcetera. They are closer to enterprise risk managers than treasurers are. By now there are practical and scientific strategies to mitigate various risk types. Insurance managers know.
In my perception treasurers can learn from insurance how to connect to business partners and help them finding solutions for complex and diverse problems. Do you think me setting them on a pedestal is right or am I too positive?
If you want to find out more about Treasurer Search and their services visit their company profile on treasuryXL.
Geld ontvangen uit het buitenland: wat zijn de kosten voor een webwinkel?
| 13-06-2018 | by Pieter de Kiewit |
Dat leek me een relevante vraag in de opbouw van een nieuwe e-commerce activiteit. Wat betaal ik, wat betaalt mijn klant? Een tamelijk frustrerende exercitie waarover onderstaand meer.
Als leek heb ik geleerd dat in de wereld van webwinkels er vele softwares worden gebruikt. Gelukkig is er al veel gestandaardiseerd en zijn interfaces in grote hoeveelheden aanwezig. Websites, voorraden, bestellingen, klantbestanden en ook boekhouden en betaalsystemen worden modulair aan elkaar gekoppeld voor verrassend lage prijzen.
Partijen als Adyen en Mollie, ook wel PSPs (payment service provider) genoemd, leveren plug & play oplossingen die het mogelijk maken dat je klanten kunnen betalen via kanalen die jij kiest. Hierbij kan je denken aan credit card, ideal, paypal en vele anderen. Internationaal is er een lappendeken aan kanalen ontstaan die voor een individuele ondernemer niet te managen is. Dus je geeft je eigen rekeningnummer aan de PSP, zij leveren software die je in je website integreert en het geld van je klanten stroomt naar jouw rekening.
De verdienmodellen van PSPs bestaan uit variaties in maandelijkse abonnementen en betaling per transactie. Redelijk transparant. Nu weten de meesten van ons dat je credit card gebruiken geld kost. Minder van ons weten dat ook degene die geld int via de credit card, bijvoorbeeld een winkelier, ook substantieel afdraagt aan de credit card company. Als privé persoon zijn we in Nederland niet gewend dat we moeten betalen voor geld overmaken, zakelijke bankklanten doen dat wel. Verder is het zo dat valuta omzetten geld kost. Vaak wordt een service fee in rekening gebracht, daarnaast is de aankoopkoers anders dan de verkoopkoers: als je naar de bank gaat en €100 omzet naar $ en het op dezelfde dag terug wisselt, hou je veel minder dan €100 over. Zelfs als er geen service fee is.
Met deze kennis klopte ik als MKB-er aan bij diverse PSPs en legde hen de volgende vraag voor: “als mijn product €500 kost en een klant koopt het in de US met $ via credit card, wie verdient er dan hoeveel aan?” en “zal ik in dit scenario minder dan €500 krijgen of zal de desbetreffende klant omgerekend een opslag moeten betalen?”. Geen van de aangeschreven PSPs kon of wilde me beantwoorden.
Ik heb besloten in de opstartfase niet door te vragen, ook omdat de uitwisselbaarheid van PSPs gemakkelijk is en mijn verkoopvolume in deze fase laag zal zijn. Voor hen die, net als ik, e-commerce ambities of al succes hebben, lijken me dit relevante vragen. Hou er rekening mee en ik benieuwd naar ervaringen en expertise. Bij voortschrijdend inzicht meld ik me weer.
Pieter de Kiewit
Owner Treasurer Search