STEP2 community successfully completes migration to continuous gross settlement

Today, the participants in EBA CLEARING’s pan-European euro mass payment system, STEP2, successfully concluded the migration to the new continuous gross settlement (CGS) mechanism. With this achievement, the STEP2 user community has completed the groundwork for faster delivery of SEPA payments and extended opening hours for STEP2.

CGS enables real-time settlement of large payment volumes at any time during the business day. For the STEP2 SEPA services, CGS has replaced a cycle-based settlement approach, where payment transactions were only settled several times a day, at the end of pre-defined settlement cycles.

The migration to CGS is part of a major upgrade of the STEP2 system, which will allow users to shorten end-to-end processing timelines for SEPA payments submitted in files from hours to minutes, for the benefit of European businesses and consumers.

“With the migration successfully completed, we now have all our participants from 28 countries using CGS and extending full reach for SEPA payments via this enhanced settlement mechanism to any payment service provider across Europe. Thanks to a phased migration approach with six windows over a period of 13 months and a comprehensive information and testing programme, we managed to ensure a very smooth changeover,” said David Renault, Head of STEP2 Services at EBA CLEARING.

He added: “Our next step is to roll out further enhancements, which will enable our users to fully take advantage of the faster delivery of settlement results and the extended operating hours of the service going forward. Together with our participant community, we are working on a detailed roadmap to make these improved service levels available to end users throughout SEPA.”

STEP2 is a pan-European automated clearing house, which processes on average close to 60 million SEPA credit transfers and direct debits per day. As a cornerstone of the SEPA processing infrastructure, STEP2 provides full reach for SEPA credit transfers and direct debits across all countries of the Single Euro Payments Area (SEPA); to this effect, the system connects the more than 4,700 payment service providers operating in Europe.

STEP2 is owned and operated by EBA CLEARING, a European-owned, European-governed and European-regulated financial market infrastructure provider. The system has been classified as a systemically important payment system by the European Central Bank since 2014 and is held to the highest oversight requirements.