Cross-border payments specialist Ascend Global Solutions has added Checker to its suite of J2EE products. Checker is a web-based tool designed specifically to mitigate the effect of the recent BIC to IBAN initiative, which requires that all euro payments must have valid branch and account numbers to avoid the risk of rejection and penalty charges.
In January 2006, the European Payments Council introduced a resolution allowing receiving banks to charge for repairing any cross-border euro payments which contain invalid IBANs (International Bank Account Numbers) and BICs (Bank Identifier Codes). Since 1 January 2007, receiving banks have also been able to reject such payments yet still charge for doing so. Charge-back costs in excess of EUR50 are not uncommon.
The failure rate for cross-border payments averages around 65 per cent of all payments and of this total, it is believed that around one third fail because of missing or incorrect reference data, according to Ascend.
Checker performs an initial check to ensure that the customer IBAN structure is valid, and then deconstructs the IBAN to automatically extract the beneficiary bank, branch, routing bank and correspondent bank details. Checker not only checks that the IBAN is present and properly formatted, but is also able to deconstruct it into its constituent parts and use the reference data to provide full routing instructions for the payment.
“The reference data element within Ascend’s Checker component enables banks and their customers to produce correctly formatted payments that will process straight-through and thus avoid the risks of charge-backs and rejection by the ultimate receiving bank,” explains Tony Marks, partner, channel director for Ascend Global Solutions. “Data within Checker is provided by CB.Net and is seamlessly integrated into the Ascend offering. The data itself comprises two main elements: bank identifiers, ie BICs plus national clearing codes such as sorting codes in the UK, BLZs in Germany, ABAs in the US et cetera, and standing settlement instructions (SSIs), which determine the routing of payments between banks.”
Checker can be deployed as a standalone component which allows the user to check data provided by the remitting customer. Being web-based, it can be accessed over the internet. Alternatively, Checker can be fully integrated into a bank’s portal or back office system.