E-invoicing, Digital Identity by mercy2beans120

VIEWS: 11 PAGES: 16

									E-invoicing, Digital Identity & EBPP
- creating added value for customers in SEPA




                                         Erkki Poutiainen
                                      14 November 2006
Challenges for e-invoicing in SEPA?




2   14 November 2006   E-invoicing, Digital Identity & EBPP
Challenges for e-invoicing in SEPA?
   Legal challenges
     – Validity of an electronic document. In different countries?
   Technical standards
   Elecronic signature and the trust chain
   Lack of European models – rules of the game
   Who are/should be the driving actors?
   Business case
      – Marginal demand for cross-border e-invoicing?
      – For the invoice senders and receivers?
      – Business case for service providers?


3   14 November 2006   E-invoicing, Digital Identity & EBPP
The commercial scene in Europe – importance of SME

   17 million corporates in Euro area, 25 million in whole SEPA
     – 90+ % of these are micro, employ < 10 people, represent 15% of turnover and
          employ 25 % of all.
      – or 98+ % employ < 250, represent >50% of turnover and employ 60 % of all.
   310m (470m) consumers as their B2C customers
   Facilitating SME ’s in digitalized and networked economy
     – SME cannot afford to invest in advanced ERP systems
     – SME cannot afford to communicate in x number of standards to their
          counterparties
      – SME cannot afford to support connectivity to x number of counterparties



4   14 November 2006    E-invoicing, Digital Identity & EBPP
How to reach the counterparty?

     Top 5000(?)




        SME
                                                                     Consumers


                                      Value of the bank initiative

5   14 November 2006   E-invoicing, Digital Identity & EBPP
Electronification & automation of external processes –
source of savings and quality

                                                     Company
       Supplier                                                Customer
                                                        X

Some requirements for external interaction


   Counterparty identification
   Reachability (as many of my counterparties as possible)
   Standards for messaging
   End-to-end standards for contents
   Rules and responsibilities in the interaction
6   14 November 2006   E-invoicing, Digital Identity & EBPP
    Examples of interactions and processes

                                                     Company
       Supplier                                                Customer
                                                        X

   Service/sales information - catalogues
   Register in service
   Fill in, sign and send documents
   Agree/accept terms of delivery
   Order/commit to buy, confirm orders
   Invoicing
   Initiate payment
   Collect and reconcile information on received payments

7   14 November 2006   E-invoicing, Digital Identity & EBPP
Let us start from the e-invoice: Some national, proprietary
and industry-specific solutions are already there
   Cluster- model
      –   commercial cluster: one big player - many small, or an industry cluster many2many
                                                                                                 Cluster
      –   Service provider can be a integrator hub, operator or a bank                           model

      –   ID & Authentication are provided by the common service provider                        Large
                                                                                                  actor
      –   Communication – files point-to-point, or templates on server, ’e-mails’

   Centralized model
      – Typically national solution around an ’ACH’ or service hub                       Hub
                                                                                         model
      – Customers may link directly or through service members
   De-centralized model
      – Customers link through participants, no central hub
      – Open to all obeying the rules
                                                                            De-central
                                                                            model




8   14 November 2006      E-invoicing, Digital Identity & EBPP
Cross-border issues and inter-operability gap
                        Un-harmonised legislation
                        Un-harmonised legislation
                        • EU legislation allows e-invoices to be used for VAT
                        • EU legislation allows e-invoices to be used for VAT
                          purposes but, even if the EU directive produced a
                          purposes but, even if the EU directive produced a
       Cluster            single set of rules individual governments may and
                          single set of rules individual governments may and    De-central model
       model
                          do interpret the rules differently
                          do interpret the rules differently

       Large
                        Lack of common e-invoice standard and other
                        Lack of common e-invoice standard and other
        actor           technical elements
                        technical elements
                        • multiple e-invoice “standards” lead to fragmented
                        • multiple e-invoice “standards” lead to fragmented
                          networks and critical mass remains to be achieved
                          networks and critical mass remains to be achieved
                        Lack of mass-market e-invoice services and network
                        Lack of mass-market e-invoice services and network
                        • Common organization and schemes lacking
                        • Common organization and schemes lacking
                                                                                    Hub
    De-central model                                                               model

                                                                    Hub
                                                                   model




9    14 November 2006       E-invoicing, Digital Identity & EBPP
So what’s the problem for Europe?
Drafted issue list in the EBA E-Invoice WG
    Poor status of legal environment – validity of the electronic
     document cross countries, Differing requirements
    Chain of trust, security and authenticity
      – requirements of authorities
      – requirements of business parties
      – electronic signature
    Interoperability model (scheme)
    Technical standards
    Unclear business perspective
      – For natural reasons, demand is not well established
      – Service providers are hesitant in current environment

10   14 November 2006   E-invoicing, Digital Identity & EBPP
Electronic banking – corner stone for federated
authentication - Trust on banking

                                        The sender is known
                                       The receiver is known
                                 The banks are responsible for ID
                                The information is carried through
                                   a secure network end-to-end
      BankID                          Responsibilities are clear                  BankID
                               Is this enough for making business?

                   Bank A                                                    Bank B

             Know your customer                                            Know your customer
                                                    ’just like payments’

11   14 November 2006       E-invoicing, Digital Identity & EBPP
                                                                               Trust
     Example FINVOICE: Enabling electronic                                   invoicing
                                                                               Scheme
     by re-using payment infrastructure                                        Interoperability
                                                                               Standard
                                                                               Business model

                                                   Order
             Seller                          Order confirmation                    Buyer

           E-bank                                                                 E-bank
                                                                                       Automated
                  Invoice                                                              payment order
                                                                                       single / bulk
     Payment Advice /                                     Invoice finance   Invoice /
     Receipt                                                                Invoice alarm /
     Reconciliation                                                         payment proposal

                                           Payment infrastructure
          Bank A                                                                   Bank B
                                                 Interbank networks
12   14 November 2006       E-invoicing, Digital Identity & EBPP
Bringing in all counterparties
- Example of sending invoices
 Through one channel reach all (kinds of) counterparties

                                                                                      Netbank
                                                                                      customer
                                                            Invoicing

                                                                         Other
                                                                         bank
                                                                                   File service
                        E-INVOICE                                                  customer
                                                House bank
                        Operator
                                                                        Operator
                                                         Payments
                                                                                    Non-
                                                                                    E-customer

13   14 November 2006           E-invoicing, Digital Identity & EBPP
Providing the inter-connectivity: Role for banks
 The interaction between businesses, business and consumers and public sector and
 citizens is moving to electronic value chains.

        Currently there are differences in roles that banks play, but:
        Banks can accelerate the transition towards e-invoicing:
            1.Easier - build on established e-banking habit and trust
            2.Cheaper - reuse familiar identification, signature, file
                service and payment tools
            3.Secure - banks have had to invest in strong security and are part of
                defence against money laundering and fake invoicing
            4.Faster - sales power to recruit SME mass market to start using file
                services or internet banks for creating and sending invoices (just like
                payments)

        But this works only if banks do it together – and further –
         respond to large corporate requirements
14   14 November 2006      E-invoicing, Digital Identity & EBPP
Hurdles are known – who should work to bring them
down?
    Legal- EU–level issue and requires harmonization -> EU
     Commission
      – Challenges of different levels of requirements – harmonize up/down/average?
      – Must address also the cross-border service provision- Shared service center
           model

    Trust & e-signature -> corprorate & service providers
      – Treat legal requirements separate from business requirements to discover real
           problems and hurdles

    Model for Inter-operability (scheme) -> start with interested banks
    Standards -> re-use the payment kernel path



15   14 November 2006   E-invoicing, Digital Identity & EBPP
                          Questions & Comments?




                                                    Thank You!

                        erkki.poutiainen@nordea.com
16   14 November 2006     E-invoicing, Digital Identity & EBPP

								
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