31 banks automate euro payments in time for EC Price Regulation

EBA Clearing's pan-European ACH brings industry closer to single euro
payments area

London, 30 June 2003 - 31 banks are now live on the new Euro Banking
Association (EBA) STEP2 pan-European automated clearing house, meeting
tomorrow's deadline for the EC Regulation 2560/2001 on cross-border
payments. 18 banks started operations in pilot mode on the new system on 28
April 2003 and a further 13 banks went live today including Commerzbank,
HSBC, JPMorgan Chase, HypoVereinsbank and Rabobank.

The EC Regulation, which comes into effect on 1st July 2003, requires that
banks in the EU offer cross-border credit transfers in euro at the same
price as corresponding domestic transactions, bringing down the total amount
of cross-border charges from approximately 16 euros per transaction to less
than 0.5 euro.

With STEP2, EBA Clearing is helping banks to mitigate the cost implications
of the EC Regulation by enabling them to automate low value, high volume
bulk payments in euro within the EU. The EBA's highly flexible STEP2 system
was built by Italian technology service provider, SIA and uses Microsoft
technology to allow banks to connect all internal systems quickly and simply
to the automated clearing house.

Deutsche Bank which joined STEP2 earlier this year has already gained
experience with the EBA STEP2 system. Hansjörg Nymphius, Global Head of
Methodologies & Performance Management at Deutsche Bank said, "STEP2 has
been great for us because we have been able to reduce our interbank costs so
that we are now well-prepared to process EU-regulated payments."

Linda Smith, Head of Payments Industry Management and Strategy at HSBC said
"The EC Regulation has placed significant pressures on banks in the EU to
reduce bank charges and we believe that we will be able to meet these new
regulatory requirements by connecting to STEP2, which through the hard work
and co-operation of the EBA and the pilot banks, creates a very simple,
quick and low cost process."

Gilbert Lichter, CEO of EBA Clearing, said: "We had a single market and a
single currency but we did not have a single retail payments area. Crossing
a border should not cost a customer more and therefore banks needed to get
their cost structures down. The creation of STEP2 has been all about
reconstructing the way bulk payments are made across Europe and delivering
greater efficiency across the region."

Renzo Vanetti, CEO, SIA said: "With tight deadlines it was essential for us
to develop an automated platform that could be integrated quickly and easily
by banks wishing to participate in EBA STEP2. Microsoft has helped us to
change the economics of this type of solution by improving cost, flexibility
and speed to market. The single payments area, a key reason for creating the
single currency in Europe, is now becoming more of a reality."

Paul Shetler, Financial Services Industry Manager for Microsoft EMEA said:
"XML-based technology is all about breaking down barriers - between systems,
between companies and across geographies. The retail payments arena is a
great example of where this technology can make a real impact. EBA STEP2 was
developed by SIA in just ten months and banks are already experiencing the
benefits. We believe we can offer real support in creating efficient,
streamlined systems and are committing significant resources to help drive
these initiatives in the financial services industry."

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