20 December 2013
Initial experiences of SNS Bank with CPS: easy to use and moderately optimistic
Equens Corporate Payment Services (CPS) has been up and running since the beginning of 2013 and has already processed a large number of transactions. SNS Bank has been using CPS for six months and still has relatively little experience with it. “The majority of contracts have been entered in the system, but so far few of our clients are using it to submit transactions”, explains payments expert Christel Bouwman of SNS Bank. “And, of course, that’s what it’s all about. At present, transaction volumes are still limited, but we expect to see a dramatic increase in December.” In December, the internal collectors will be migrated, and SNS Bank will also start collecting insurance premiums, mortgage loan interest, etc.
With the payment product CPS, Equens supports businesses, service agencies and banks. Although payments will be harmonised as a result of the introduction of SEPA, some differences in handling between banks will remain. This is a problem for companies who do business with multiple banks, because they need to support these differences in the payment orders they submit. CPS minimises this problem, because businesses can submit different transactions to Equens in a single message. The payment processor then takes care of the conversion for the specific bank, relieving businesses of this task.
December is a busy month for CPS at SNS Bank. Bouwman: “We hope that our business customers will soon migrate from domestic payments to European payments. SNS Bank has made the decision to have all European collections initiated by business customers processed via CPS. This decision was made for efficiency reasons, because with CPS we only need to set up a single flow.”
SNS selected CPS because the bank wishes to offer its customers multibank delivery support, as well as direct delivery for corporate businesses via Equens. This concerns service agencies in particular. Service agencies will be able to deliver payment and collection files containing transactions intended for multiple banks, and Equens will sort the transactions and submit them to the relevant bank. “Many companies use service agencies, for example for salary payments. These are the types of transactions we want to support.”
CPS offers two options: the Clearing & Settlement Mechanism (CSM) route or the bank route. If the CSM route is used, Equens immediately handles all further processing to other banks and transactions are not sent to the bank (in this case, SNS) first. If the bank route is used, all transactions are first submitted to the bank. The bank then determines how the transactions are handled. SNS has opted for the CSM route, whereby all transactions received in CPS are first reported to the bank. “SNS is legally required to perform transaction filtering, and we will also pre-debit the payment batches.” For the purpose of doing this at the bank, Equens has developed two reports as part of the standard package: “The ‘Embargo Check Report’ for transaction filtering and the ‘Booking Report’ to enable pre-debiting.”
The system was customised for SNS with these two adjustments. Does the system work properly? Bouwman states that the uploading process for batches by the customer, using the Equens token, is very easy. A further plus is that Equens offers proper customer support by telephone. “The module is completely new, and it takes some time to get familiar with the product. The fact that Equens quickly answers any question by telephone is very helpful. Since all transactions need to be handled the same day, there is little time for reading instructions.”
Experience with CPS is still limited due to the low transaction volumes. Bouwman also says that, since it is a new system, “Like all new things, it takes some time to get used to it, but I’m convinced things will soon start going much more smoothly.” The majority of contracts have now been entered in CPS, but the problem the bank faces is that service agencies business customers wish to use are not all available in CPS yet. Bouwman: “It is inconvenient for business customers contracts cannot be entered and transactions cannot be processed.” This problem will disappear once more service agencies decide to go live with CPS.
At the moment, Bouwman is moderately optimistic about the product, as she thinks some aspects could be improved upon and enhanced. “I think the contract module used in CPS is rather intricate, and I believe it should be possible to link the value-added services at the account level, not just at the customer level.”
SNS has customers with multiple payment accounts. In CPS, a customer is entered using basic customer data. Value-added services can then be added for that customer, for example European transfer (SCT) and European collections (SDD). With SDDs, limits can be specified, among other things for the number of batches a customer can submit in a particular period, or the maximum total amount of a batch. “At that stage, no account number has yet been entered. This means that any limits linked to a customer will apply to all accounts of that customer that are linked later. This is undesirable, since a customer may have multiple accounts for different purposes. We would like to set limits per account, rather than per customer”, says Bouwman.
Another thing she thinks is lacking is a mandatory ‘Creditor ID’ field in CPS for European collections. ‘Creditor ID’ is a unique identification number for the collector. “This field is not mandatory in CPS, but we believe that it should be, and that the ID should be verified by Equens. After all, the ‘Creditor ID’ is present in all transactions for European collections, and this ID is currently not validated.”
Another point for improvement is the retrieval of data from CPS. “It is, for instance, not possible to download an Excel summary. Without this feature, it is not possible to view a summary of the number of batches run with CPS or the number of contracts implemented in a particular period.”
All of the parties are busy with SEPA
In order to facilitate discussion of these issues, Bouwman suggests a user group for sharing experiences. “Equens thinks this is a good idea, but all of the parties involved in SEPA are currently extremely busy and will have little time for such an initiative.” SNS also feels the pressure of the approaching deadline. “The question is not so much whether we will succeed, but whether we can convince our customers to take action, in particular business customers. Private customers are well supported, and for them the impact of the transition to SEPA is limited. Business customers, however, must take action.” SNS Bank has noticed little of the predicted queue, but Bouwman thinks it is not a good sign that the volume is not gradually growing as predicted. “A number of very big collecting parties have completed the transition to SEPA, but even some of those parties are still dragging their feet.”