Introduction to Account Switching Service
The Account Switching Service is designed to help Temenos Transact banks automate the process of switching their customer’s payment accounts whilst ensuring continuity of payments within the 13 month switching period, as is stipulated under Article 10 of the European Union (EU) Payment Account Directive (PAD).
The service supports the key components of managing the Switching Service in countries such as the Netherlands, where the Dutch Payment Association’s Bank Switching Service provides the basis for the automatic redirection of payments from a customer’s old account to their new account, through:
- Uploading and managing of the switching account details.
- Re-routing of payments made to an old account to the customer’s new account.
- Providing summary details of all periodic payments including direct debit mandates and blocks within a five day period.
- After 12 months, providing summary details of all re-routed transactions executed during the switching period.
The purpose of the Switching Service is to offer both business and private customers maximum convenience when switching their payment services from one bank to another. The customer is offered the service, where payment transactions are routed to the new payment account from a certain date until the end of the 13 months period, from the time the switch instruction is activated. The customer is provided maximum support for the changeover of the payment products that need to be renewed. For example, standing orders, electronic banking facilities and so on.
Within the Switching Service framework, the switching business or private customer is offered the following features:
- Credit transfers intended for the old payment account are automatically forwarded to the new payment account, for a period of 13 months.
- SEPA Direct Debits (SDD) intended for the old payment account are automatically debited from the new payment account for a period of 13 months, if the creditor banks are members of the Switching Service.
- Creditors and payments originators are notified of the rerouting and requested to amend the changed IBAN in their records.
- The customer is informed that the old (originator) IBAN can be changed and amended in connection with delivery to the new bank.
- Stop standing orders with the old bank, while providing the customer an overview of these cancelled orders to enable them to be re-opened with the new bank.
- Summary of the Direct Debit blocks are enabled on the old bank account by the account holder.
Payment Types Covered by the Switching Service
The following is a preview of the scope of switching service rerouting.
| Forward or Rerouting | No Rerouting |
|---|---|
| Debit Side: | Debit Side: |
| SEPA Direct Debit | Government Order |
| Credit Side: | Credit Side: |
| SEPA Credit Transfer | SEPA Direct Debit |
| SEPA Instant Credit Transfer | Acceptgiro |
| Cross Border payment (in euro) | iDEAL |
| Debit Card (Maestro/V Pay) | |
| Cash Deposit | |
| Credit Transfer New Payment Account to Old Payment Order | |
| Government Order |
Participating Entities in the Switching Service
There are four entities in the Switching Service:
- New bank – The bank that receives the switching customer.
- Old bank – The bank the customer switches from.
- Customer – The switching customer
- Other parties – These can be originators, creditors or payroll processors.
Processes in the Switching Service
The Switching Service consists of three processes:
- Application process – This is an administrative process handled between the banks themselves.
- Recording and managing switching instructions through bank interface systems.
- Re-routing of payments – The re-routing of transfers and direct debits to the new bank is done by the originator or creditor bank or the old bank. Re-routed payments can be identified by the receiving bank without the need for any specific processing logic.
- Provision of information to the switching customer, originator and creditor – When initiating a payment or collection during the switching period, the initiating bank can check if the beneficiary or debtor IBAN is part of a centrally held switching directory. If yes, the payment can be re-routed to the new bank. The result is that during the switching period all payment and collection flows are redirected to the new bank account.
Illustrating Model Parameters
This section covers the model parameters for Account Switching Service.
| S.No. | Parameter | Description |
|---|---|---|
| 1 | ACSWIT.PARAMETER
|
This parameter table stores the validity period decided by the bank for the switch out service. The validity period can be defined in days or months. The ID of this record represents the Temenos TransactCompany ID. Synchronize and Alert Trigger fields are used to update the existing account switch table for switch out instructions and can define the days for alert generation respectively. |
| 2 | ACSWIT.SWITCH.DIRECTORY
|
This application stores the account switch instruction details of an account, which the user wants to switch from the existing bank to another bank. The ID of the record represent old IBAN number. |
Illustrating Model Products
Model Products are not applicable for this module.
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