CBPR2 2021 requirements are a big step up for Issuers

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Issuers face a significant step-up in the requirements of CBPR2 (EU2019/518) on the 19th April next year. From that date, every cardholder must receive a notification detailing the currency conversion charges applied to cross-currency card transactions. This is a material increase in requirements under the regulation that to date has merely required issuers to present generic information to cardholders on a publicly available website.

CBPR2: Issuer Requirements

EU2019/518 creates a common approach to pricing for foreign currency transactions, with all fees, commissions and exchange rate premiums consolidated into a single currency conversion cost that is compared to the ECB reference rate for that day. Today, all banks that issue payment cards must clearly present the currency conversion cost in their terms & conditions and on a publicly available website (e.g. https://alphabank.cambrist.eu/en).

By 2021, banks must also send their customers electronic notifications (SMS, email, push) of the currency conversion cost after a relevant cross border, foreign currency card transaction has been made. This a material increase in the implementation requirements with Issuers now having to:

  • Access approved transaction data across multiple card programmes and payment processing architecture,

  • Filter that data to identify relevant transactions,

  • Perform transaction specific calculations for currency conversion charges factoring in multiple pricing approaches and varying foreign exchange margins,

  • Manage a database of customer channel preferences and opt-outs for this specific notification service

  • Push out the electronic message to relevant cardholder according to their preferred channels and

  • Deploy new business intelligence to verify that service is working accurately

These requirements apply to both in-person transactions in a new currency (e.g. card present transactions) and e-commerce transactions (e.g. card not present transactions), significantly increasing the frequency and volume of messages that Issuers can expect to send.

This is a meaningful project for Issuers that deploy a single payment processing architecture and offer a single scheme’s cards. Implementation challenges multiply for Issuers that have multiple payment processing providers (e.g. for Debit vs. Credit) and offer products from multiple card payment schemes (e.g. Visa, MasterCard, UnionPay International, Diners Club etc.).

Simplify your Bank’s Path to Compliance with Cambrist’s fxNOTIFY

Cambrist provides a fully managed service that delivers currency conversion cost comparisons, per the EU regulation 2019/518 for both the 2020 and 2021 regulatory requirements. Contact us for more information.

David Fitzgerald