Banks Complacent Over EU STP Rules Claims Developer

Many Banks Unaware That New EU Directive Will Slash International Payment
Processing Profits

According to Odd Tuftin, R&D Director at CBA, Europe's leading developer of
Java-based software for bank international payment End-to-End Straight
Through Processing, many banks are still too complacent about a prevailing
EU Directive and subsequent Regulations that will dramatically affect the
amounts they can charge for international transactions.

The EU legislation, known as the Cross-Border Credit Transfers Directive
97/5/EC, came into effect in 1997. Together with later Regulations (for
example "Regulation (EC) No 2560/2001 of the European Parliament and of the
Council of 19 December 2001 on cross border payments in euro"), this
legislation will require banks to cap their charges for international
payment processing - so-called cross-border transactions - at the same level
as for domestic payments. In 2001, the average charge for a cross-border transfer of 100 Euros between banks in EU Member States was 24 Euros.

Tuftin comments, 'Far too many banks are still unaware of the impact that this legislation will have on their businesses. At the moment, they can charge a market rate for processing their customers' international payments,
but this is all set to change next year. And these institutions are leaving
themselves precious little time to adapt their business practices to the new

Tuftin adds: 'Many of those banks that have examined the EU Directive are starting to panic as they realise that they have little choice but to invest
in automated end-to-end straight through processing systems. Moreover, they
haven't left enough time to modify existing systems, or develop new solutions in-house. Consequently, these banks are left with no alternative but to buy a proprietary STP solution, or outsource their entire payment processing.'

CBA, UK Office
Tel: 020 7016 2615
Fax: 020 7637 0419
29 Harley Street
United Kingdom

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