EBA Clearing is a provider of pan-European payment infrastructure solutions. The Company is owned by 66 of the major banks operating in Europe and runs the high-value payment system EURO1/STEP1. EBA Clearing also manages the largest processing infrastructure for euro retail payments in terms of participation: over 4,600 banks across Europe are connected to one or more of its STEP2 SEPA Services. In 2011, EBA Clearing started its MyBank initiative to deliver an Online Banking e-Payment (OBeP) solution geared at making it easier and safer to sell and buy goods and services over the internet at a pan-European level.

John Broxis is Director at EBA Clearing; he joined the Company in 2002 for the building of the STEP2 platform, which processes mass payments in euro. John played a key role in evolving STEP2, managing the development and launch of the Italian Credit Transfer Service as well as of the SEPA Credit Transfer and Direct Debit Services. He also participates in a number of industry groups and his expertise includes the SEPA Schemes and the ISO 20022 XML standards. Since early 2011, John has been working on the development of EBA Clearing’s pan-European e-payment solution MyBank based on a wide consultation of payment service providers, e-merchant organisations and other stakeholders.

What are the main objectives of the EBA Clearing’s MyBank initiative and the business model behind it?

John Broxis: The main objective of MyBank (www.mybankpayments.eu) is to help all payment service providers, such as banks and payment institutions, meet the needs of their corporate and retail customers for e-commerce.

E-commerce has been witnessing double-digit growth rates in most European countries over the past few years. This has triggered a growing demand among e-merchants for improved electronic payment methods, which should be safe and simple for customers to use. One of their key requirements is the delivery of credit transfer and e-mandate solutions that are based on online banking and work at a European level. EBA Clearing’s MyBank initiative has been launched to respond to this demand.

For financial institutions across Europe, MyBank is an attractive solution because it will enable them to offer new pan-European e-payment services to their customer base. These new services will be based on their online banking environment, which they can further leverage without having to make any major investments.

How will the system work and how will interoperability be achieved among participating financial institutions?

John Broxis: MyBank is an online authorisation solution for electronic payments. It will allow Internet shoppers to pay for products and services through credit transfers or direct debits, which they can initiate via their existing online banking service.

The MyBank technical solution relies on a central directory service, which will contain the information that the solution’s participants need to interact. Participating payment service providers will just have to put in place routing and validation services that will enable them to connect to the central directory and to exchange and handle transaction requests with other providers offering the solution.

How will MyBank be scaled to incorporate the different payment types (SEPA Credit Transfers, SEPA Direct Debit mandates, payment on delivery, Person-to-person payment) during the phased implementation interval?

John Broxis: In a first phase, MyBank will support SEPA Credit Transfers and the creation and update of single or recurring SEPA Direct Debit mandates. This responds to two key requirements voiced by e-merchants across Europe.
MyBank will initially be designed for use with a browser, but can also be adapted for web-enabled smart phone applications or other devices. It is envisaged to extend the solution to other payment methods and non-euro instruments in later phases. MyBank may also be used to support e-identity services.

What steps must buyers (consumers) and sellers (online merchants) undertake in order to be able to use this payment method?

John Broxis: For consumers, no special sign-up is needed, because they already use their payment service provider’s online banking, so there is no registration process, no new passwords and no unfamiliar screens. All a customer has to do to use MyBank is to select the MyBank button among the payment methods offered on the website of the e-merchant. Customers will then be asked to enter the name of their payment service provider and will be redirected to their provider’s online banking portal where they log onto their account with their regular access data. They will find the details of their purchase displayed in their familiar online banking interface and will only have to authorise the transaction to initiate the payment.

From the e-merchant’s perspective, the use of MyBank will be straightforward as well. The website of the e-merchant will be connected to a routing service provided by its payment service provider through which the merchant has enrolled in the service. This service will redirect the merchant’s request to the validation service of the buyer’s payment service provider. The e-merchant will be immediately notified through the same channel once the transaction has been authorised.

How is data privacy and security ensured for consumers?

John Broxis: The technical and legal set-up of the MyBank solution will be such that all activities of the consumer related to the payment will take place within the safe and secure online banking system of the consumer’s payment service provider. The redirection of the consumer from the merchant’s website to the website of his or her payment service provider will be fully secured as well. All banking data will thus remain with the consumer’s online banking platform and will not be shared with any other party.

What are, in your opinion, the main advantages of using an online banking-based online payment solution?

John Broxis: The overall advantage of online banking-based solutions is that the whole payment initiation process takes place within the customer’s online banking interface. This is an environment that customers know and feel comfortable about because they use it on a regular basis to manage their accounts and pay their bills, for instance. They also trust their online banking platform because it is highly secured against fraud through the different authorisation levels that are required for carrying out any transactions within this environment.

Another key advantage of a solution such as MyBank is that it allows Internet shoppers to pay for their purchases without having to disclose their bank account or credit card details to any third party, such as the e-merchant.

In your opinion, what are the main barriers to the successful deployment of cross-border online banking systems in Europe?

John Broxis: The benefits of a pan-European e-payment solution based on online banking can only be fully reaped if the solution is widely adopted across the continent. Building up critical mass for a network solution is always a challenge if the solution is based on the interaction of different groups of actors operating in an integrated pan-European market that is still very much marked by different national practices, considerations and preferences.

As a pan-European payment infrastructure provider, EBA Clearing has considerable experience in managing the concertation process that is needed to successfully deploy Europe-wide network solutions. Over the past few months, many of our efforts around the MyBank initiative have gone into conducting a major consultation process involving numerous stakeholders. These included representatives from consumer organisations, the e-merchant community, the regulatory side, payment service providers and integrators. In order to achieve market penetration, MyBank has to meet the needs and expectations of all these different parties. Based on the feedback we received during our consultation process and on the fine-tuning we did as a result, we are confident that it will achieve this goal.