Page 66 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

Box 1. Architecture of Regional Clearing Infrastructures
STEP2: Centralized Regional ACH

STEP2 is a centralized regional Pan European ACH for bulk payments in euros. Established in 2003 to
clear cross-border euro credit transfer payments for its participating member-banks, it has expanded
its services to include clearing of domestic euro payments for participating banks – primarily in
Finland, Ireland, Italy, and Luxembourg, at present – and to include direct debit payments. STEP2 also
developed clearing services for SEPA credit transfer and direct debit transfer schemes in 2008-09.
STEP2 is a tiered connectivity system involving both direct and indirect participants with a processing
platform that provides direct routing to beneficiary banks with straight-through processing and
automated connectivity, for settlement, to TARGET2 for its SEPA services.

SICA-UMEOA: Hub-Spoke Regional Clearing Infrastructure
SICA-UMEOA, which was inaugurated in 2008, is also a regional retail payment clearing infrastructure
but is comprised of 9 centers – a central regional clearing facility, a national clearing facility in each
of the 8 member countries of the West African Monetary and Economic Union, and Clearance
Access points in each country connected to the national facility. SICA-UMEOA clears domestic and
cross-border intra-regional payments denominated in CFA francs. SICA-UMEOA clears batch files of
various payment instruments, including digitized paper items such as cheques, for all participating
banks within the region. It involves a single regional scheme on an integrated technical platform
for all regional and national operating centers. Payment obligations are netted multilaterally with
settlement on the regional RTGS system STAR-UMEOA, which is also operated by the Banque Centrale
des Etats de l'Afrique de l'Ouest (BCEAO).
EACHA: A Distributed Infrastructure

The European Automated Clearing House Association (EACHA) network is a distributed bilateral
network arrangement for ACH-to-ACH connectivity. The EACHA provides technical interoperability
standards for the straight through processing of cross-border payments among its 27 member ACHs
from 23 participating countries in a distributed bilateral network (although not all EACHA member
ACHs are actually linked to each other). The EACHA scheme illustrates the case of interoperable
national ACHs whereby the payment obligations resulting from the clearing of cross-border payment
transactions in euros are settled in TARGET2. The scheme involves an interoperability framework
between national ACHs rather than full technical integration between them. In February 2015,
the EACHA published the "Study on Interoperability of Immediate Payment Systems", followed in
November 2015 by the "EACHA Instant Payments Interoperability." Upon invitation by the ECB, the
EACHA began leading a taskforce consisting of ACHs (including members of EACHA, EBA Clearing
and representatives of TARGET2), national central banks, the ECB, and ad hoc other stakeholders,
for the purpose of delivering to the Eurosystem a set of business requirements for ensuring risk
management, clearing and settlement, and interoperability of instant payment services in euros.

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