![]() ![]() be able to manage and contain financial risks associated with the clearing and settlement process. ![]() have effective, reliable and transparent governance in place and.provide for an appropriate degree of security, operational reliability and business continuity.ensure that comprehensive data, including information about financial risks are made available to all the relevant parties.have a solid legal basis in all relevant legal systems.For example, inadequate management of the payer's direct debit mandate can result in financial risks, which may ultimately lead to the "debtor" rejecting a debit transaction parallel to the creditor being credited.įrom the Eurosystem's perspective, credit transfer and direct debit schemes should In particular, these take the form of legal risks, operational risks, financial risks and management risks with varying degrees of weightiness. In principle, credit transfer and direct debit schemes entail risks which need to be monitored and mitigated in order to maintain customer confidence in these payment instruments. Typical examples of recurring direct debits are electricity or telephone bills while an example of a one-off direct debit would be a retail payment requiring a signature (also known as the electronic direct debit scheme or ELV). Direct debits are initiated by the payee, either as an individual payment or as a series of payments and are based on the payer giving his consent (mandate) to the payee, his payment service provider or to the payment service provider of the payee. One-off invoices or tax arrears are often paid by credit transfer, for example.Ī direct debit scheme encompasses functions, procedures, agreements, rules and instruments, which allow the authorised debiting of the payer's account. A credit transfer scheme encompasses functions, procedures, agreements, rules and instruments, on paper or in electronic form, enabling the execution of a payment instruction, which a payer issues to his payment service provider – for instance his house bank – in order to transfer funds to the beneficiary (the payee). Credit transfers and direct debits are by far the most commonly used payment instruments in Germany and are therefore sometimes referred to as "traditional payment instruments". ![]()
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