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<ManualTopic ID="/baanerp/tf/onlinemanual/sepa0100" xml:lang="en">
   <Header>
      <Title>Introduction</Title>
      <Keyword type="header" order="d1e1653234">
         <Level1>SEPA</Level1>
         <Level2>master data setup</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1653239">
         <Level1>Master data setup</Level1>
         <Level2>SEPA</Level2>
      </Keyword>
   </Header>
   <GeneralSection>
      <SectionTitle>SEPA</SectionTitle>
      <Paragraph>The Single Euro Payments Area (SEPA) is the area where citizens,
		companies, and other economic participants can make and receive payments in
		euros, within Europe, whether between or within national boundaries under the
		same basic conditions, rights and obligations, regardless of their location.
		The geographical scope of SEPA encompasses the 27 EU member states, Iceland,
		Liechtenstein, Norway, and Switzerland.</Paragraph>
      <Paragraph>SEPA is an EU-wide policy-maker-driven integration initiative in
		the area of payments, which is designed to achieve the completion of the EU
		internal market and monetary union. After the introduction of euro notes and
		coins in 2002, the political drivers of the SEPA initiative – EU governments,
		the European Commission, and the European Central Bank – focused on harmonizing
		the euro payments market. Integrating the multitude of national payment systems
		that exist today is a natural step towards making the euro a truly single and
		fully functioning currency.</Paragraph>
      <Paragraph>SEPA will become a reality when a critical mass of euro payments
		has migrated from legacy payment instruments to the new SEPA payment
		instruments.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Common data format</SectionTitle>
      <Paragraph>A common data format that is used by all parties in a payment
		transaction is essential for cost-efficient handling of billions of
		payments.</Paragraph>
      <Paragraph>Today, dozens of different data formats are in place to process
		payments across different national and European clearing systems in the EU.
		Therefore, the realization of SEPA requires agreement on a common set of data
		to be exchanged through a common syntax.</Paragraph>
      <Paragraph>The SEPA Data Formats, as specified by the EPC for the exchange
		of SEPA payments such as direct debits and credit transfers, represent such
		common data sets.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>ISO 20022 XML message standards</SectionTitle>
      <Paragraph>The SEPA Data Formats do not constitute an exclusive European
		standard. Rather, the SEPA Data Formats are based on the global ISO 20022 XML
		message standards. These formats are binding for the exchange of SEPA payments
		between banks. Business customers are recommended to use the SEPA Data Formats
		to initiate payments. However, banks can continue to accept other formats from
		customers for SEPA payments.</Paragraph>
      <Paragraph>The International Organization for Standardization (ISO) is the
		world’s developer of global standards. ISO combines the expertise of
		representatives from all sectors. ISO provides any stakeholder group the
		opportunity to participate in the process of standard setting. ISO has worked
		on modeling financial messages, which is set out in ISO Standard 20022 ( <Link href="http://www.iso20022.org" role="wwwlink">www.iso20022.org</Link>). This
		standard provides a methodology to define business processes and the related
		data elements.</Paragraph>
      <Paragraph>In the ISO process, business requirements are defined for all
		global markets. Different markets have different data needs. Therefore, each
		community may need to define its own version within the global standard,
		specific to its own situation. In this respect, the ISO messages have been
		adjusted to meet the SEPA requirements. The role of EPC in defining the SEPA
		Data Formats consists of identifying, within the global standard, all the
		necessary data elements for making SEPA payments as defined in the SEPA
		rulebooks.</Paragraph>
      <Paragraph>These "core" data elements are indicated by yellow shading in
		the SEPA Implementation Guidelines that are released by the European Payments
		Council (EPC) with respect to the SEPA Credit Transfer Scheme and the SEPA
		Direct Debit Schemes. To allow communities of banks that participate in the
		SEPA Schemes to provide additional optional services (AOS) based on the
		schemes, the EPC has identified data elements within the global standard that
		can be used for this purpose.</Paragraph>
      <Paragraph>These data elements are indicated by white shading in the
		Implementation Guidelines. The SEPA Data Formats are a valid subset of the
		global ISO Standard 20022.</Paragraph>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>SEPA Credit Transfer Scheme</SectionTitle>
      <Paragraph>In LN,
		two SEPA solutions have been implemented for the SEPA credit transfer scheme.
		Based on the ISO 20022 XML message standards and a user-defined layout with a
		mapping to LN data, the
		system generates an XML file to be stored and subsequently sent to the
		bank.</Paragraph>
      <Paragraph>With regard to credit transfers in general, the originator
		(payer) completes a credit transfer instruction and forwards it to the
		originator’s (payer’s) bank by any agreed means. The originator’s bank receives
		and checks the credit transfer, and rejects erroneous instructions. Next, the
		originator’s account is debited and the credit transfer is sent to the clearing
		and settlement mechanism (CSM).</Paragraph>
      <Paragraph>The CSM forwards the credit transfer message to the beneficiary
		bank and settles the amount of the transfer. The beneficiary’s bank receives
		the credit transfer message, checks the credit transfer message, and credits
		the account of the beneficiary.</Paragraph>
      <Paragraph>The SEPA Credit Transfer Scheme allows payments services
		providers to offer a core credit transfer service throughout SEPA, whether for
		single payments or bulk payments. The scheme’s standards facilitate payment
		initiation, processing, and reconciliation based on straight-through-processing
		(STP). The scope is limited to payments in euros within SEPA countries.
		The credit institutions that perform the credit transfer must be scheme
		participants, that is, both must have formally adhered to the SEPA Credit
		Transfer Scheme. There is no limit on the amount of the payment that is carried
		under the scheme.</Paragraph>
   </GeneralSection>
</ManualTopic>