Success Story: STET

Largest automated clearing house in Europe uses Axway Gateway to process 13 billion payments yearly

  • Headquarters

    Paris, France
  • Industry

  • Challenge

    • Design and build CORE system, based on leading market technologies, capable of adapting to changes within European payment industry to offer both local and global protocols
    • Achieve European expansion through the marketing of shared platform for the consolidation of payment industry
  • Results

    • Axway Gateway provides multi-channel, multi-format and multi-service architecture to run multiple CSMs over a single payment platform
    • ƒUnique shared platform positions STET as highly competitive player for European consolidation of payment industry
    • Leading market technologies ensure protocol, security and governance compliance
    • Robust and reliable platform resulting in zero technical incidents
    • Highly scalable and flexible gateway solution enables European expansion with no change to technical infrastructure
    • Gateway provides EBICS for future expansion and enhances STET’s service offering

“Axway is recognized within the banking community worldwide for supporting all B2B protocols used by financial institutions and corporations. It quickly became clear to us that we could rely on Axway’s capability to facilitate payment flows that adhere to both local and global protocols over a unique platform.”

STET’s CORE system provides real-time processing of clearing and settlement services to a community of over 500 financial institutions in France, which are associated by direct and indirect membership. STET launched the CORE system on January 28, 2008 to meet the requirements for extensive changes in the European payment industry brought about by the launch of the SEPA¹ Schemes.

STET was founded in December 2004 by six major French Banks: Banque Fédérative du Crédit Mutuel, BNP Paribas, Caisse d’Epargne, Banque Populaire, Crédit Agricole SA, and Société Générale.

The processing services STET offers cover a wide range of payment instruments comprising not only SEPA payments, but the full range of French national payments such as credit transfers, direct debits, card payments, ATM transactions, and checks and other paper instruments.

In 2009, STET’s CORE system processed 13 billion transactions having a value of €5.1 trillion, and card-originated transactions amounting to six billion — processing that represents 48% of the total volume of all payment transactions cleared in Europe.

Platform Designed with Leading Technologies

Rodolphe Meyer, CIO at STET, has been in charge of the technical and payment flow architecture, and he made the strategic choices as to the technologies to be used in building the CORE system. A flexible system was required to migrate all legacy payment instruments to the CORE system with no change or simplification in their definitions. The design and development of the CORE system, as well as the transition of the former ACH to the new system, was accomplished in less than five months.

“Our goal was to build a system based on the most advanced technology components available on the marketplace to support the growing demand for fast and efficient products and services, and at the same time, offer flexibility to support the existing diversity of payment instruments,” Meyer said. “Axway Gateway was chosen in this context as our unique multi-protocol communication gateway and interface to all external parties.” In effect, all 13 billion payment transactions per year are handled by Axway Gateway. STET uses Axway’s products to handle communications with TARGET2 through SWIFTNet, and also to exchange files within its community via a VPN based on Axway Gateway and the PeSIT protocol.

Meyer continued, “Axway is recognized within the banking community worldwide for supporting all B2B protocols used by financial institutions and corporations. It quickly became clear to us that we could rely on Axway’s capability to facilitate payment flows that adhere to both local and global protocols over a unique platform. The foundation of our European expansion strategy relates to the diversity within the European market and with a high percentage of legacy payment instruments. With Axway, we have the ability to run multiple CSM²s over a single-payment platform. Axway helps us seamlessly achieve this goal through its multi-channel, multi-format and multi-service architecture.”

Unrivalled Processing Speed and Volumes Result in Lowest Transaction Fees

STET’s processing capacity has been benchmarked on its current configuration for 300 million transactions per day, and with a processing speed of 30 million transactions per hour. Christmas holidays and Mother’s Day can require daily transaction peaks over 100 million. The CORE system provides a margin designed to integrate European volumes onto the same platform without the need to make changes to the technical infrastructure.

Striking economies of scale are achieved through the use of Axway Gateway as the unique solution to handle such enormous volumes. Production and maintenance costs are low as few resources are required for the operation and maintenance of Axway’s platform. In addition, Axway and STET worked together to determine an attractive pricing schedule based on the large number of licences acquired. All these factors combined enable STET to offer the lowest fees per transaction on the market today, and positions the company as a highly competitive player as the European market moves toward consolidation.

“The choices we made when building our CORE system, based on the best technologies available such as those offered by Axway, enable us to pass along savings to our customers, and offer the lowest transaction fees and the largest range of access protocols in Europe today,” Meyer said.

“The choices we made when building our CORE system, based on the best technologies available such as those offered by Axway, enable us to pass along savings to our customer, and offer the lowest transaction fees and the largest range of access protocols in Europe today.”

All Levels of Compliance Met with a Critical Payment System Serving the Entire French Economy

STET is classified by the Eurosystem as a “Systemically Important Payment System” (SIPS) and it complies with the ten core principles applicable to such systems, as defined by the Bank of International Settlement and adopted by the Eurosystem. The principles embodied ensure the highest level of resilience and operational robustness in the fields of operational, systemic and financial risk mitigation.

STET is one of the few Automated Clearing Houses with SIPS certification in Europe. In the context of its responsibilities and the criticality of its operations, it is supervised and audited by The Bank of France and the European Central Bank. STET is therefore certified as highly reliable from an operational standpoint. It implements accredited governance standards, it applies all the necessary security levels and rules, and it is guaranteed in terms of contractual agreements. These accreditations also rely on the vendors STET has selected as the basis for the building of its CORE system.

STET holds a very strong position in France, and the effectiveness of its operations are of great importance to the country’s entire economy. The system has proven to be extremely stable and reliable. As an example, since the system went into production early 2008, there have been no technical incidents or service interruptions.

Axway Accompanies STET in its European Expansion and Consolidation Strategy

Axway is the ideal partner to accompany STET in its European expansion because its technology fully conforms to STET’s current and future requirements as shown by:

  • Offering the widest range of access protocols over a unique shared platform
  • Delivering and implementing a multi-protocol communication gateway to financial institutions throughout Europe
  • Leveraging existing customers and strengths in Europe
  • Ensuring compliance with global standards including the Electronic Banking Internet Communication Standard TS (EBICS)
  • Offering pre-packaged SWIFT and SEPA format libraries, mappings and processes
  • Ensuring robustness, reliability and security
  • Leveraging economies of scale through high volumes over shared platform

“Our strategy is to concentrate on building our business by bringing new European customers into our system, while at the same time enabling them to reduce costs. Axway is well positioned to accompany us throughout our European expansion by delivering and implementing its Gateway to onboard the new members to our system,” Meyer concluded.

¹ Single European Payment Area
² Clearing and Settlement Mechanism

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