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ETEBAC is almost finished…

Pierre Peutin
Pierre Peutin
Chief Data Officer and Accounting / Financial IT Systems Consultant

Last week I attended a breakfast concerning the migration from French ETEBAC protocols to EBICS / SEPA for bank telecommunication applications. I believe it would be of interest to share this information with everyone, so that all small and medium-sized businesses can prepare for this migration of their communications system with their banks.ETEBAC, what is it? I’ll start first by putting certain elements into their context by recalling that this is the standard inter-bank telecommunication application. ETEBAC which means “Exchange TElematiques BAnque Clients” has been used since 1991. It allows a company to exchange files (account extracts, transfers, BOR, etc…) with its banks. I emphasize the plural of the word bank as it only makes sense if the company works with several banks on one hand, and secondly, if it wishes to automate its dealings with them.There are several versions of ETEBAC:

  • ETEBAC3 which is the unsecured version of the protocol where the client is obliged to confirm all dealings by fax with its bank
  • ETEBAC5 which is the secure version of the protocol operating with smart cards (encrypted files and an authenticated transmitter).
  • This protocol works on the basis of flat files of fixed length.Why is it going to change? On July 1, 2011, maintenance and the marketing network TRANSPAC will cease to operate. This will result in the termination of banking protocols operating under X25 (ETEBAC 3, ETEBAC 5, etc.). These protocols will then migrate to Internet networks.With the end of the Transpac network, the banks will therefore be obliged to use other standards such as:

  • EBICS for Electronic Banking Internet Communication Standard.
  • SEPA Single Euro Payment Area.
  • SWIFT Society for Worldwide Interbank Financial Telecommunication.
  • These new protocols will operate on the internet and use XML. Among the notable developments, I can cite the lengthening of the text zone from the current 30 characters, to 140 characters and the abandonment of the bank identification form, for the IBAN which has a more European context.What will change? Concretely, this means that a company should verify its information system to see if it will be compatible with these new changes (changes from traditional bank identification form to IBAN, compatibility of software used, etc…). If this is not the case, then the company should contact a provider who will audit the IS and propose the most appropriate solution.This new standard will oblige the banks to perform better, in terms of turnaround time (D +1 working day) and the application of invoicing for European transfers.But I think we should be very careful about the offers that are being proposed because presently, all banks do not propose the same protocol and also each bank will offer different solutions according to the protocol they have chosen. We must be very vigilant concerning the coherence of the information system in order to use a single protocol, which is entirely possible.Who will be affected? The choice of using EBICS depends on the number of banks with which a company interacts. Let’s say if the company is only working with one bank, to implement a simple solution like EDI via the website of the bank would be adequate.In the case the company is working with several banks and wishes to automate the exchanges then it should move towards an EBICS protocol.For the rest, in the case of very large companies or to companies that perform many daily transactions, it may be more helpful to approach the SWIFT protocol.Companies must address the issue now to be ready to change over as of July 1, 2011. Calculate your offshore budget with our price maker.

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