Voice of the Industry

How BNP Paribas is cracking down on direct debit fraud

Wednesday 13 December 2023 09:36 CET | Editor: Claudia Pincovski | Voice of the industry

Delving into the realm of SEPA Direct Debit, discover how BNP Paribas navigates the challenges of IBAN fraud. Unveiling a solution from Worldline, this narrative explores an approach to enhancing security in the world of digital transactions.

BNP Paribas is one of the largest banks in the world, operating in 65 countries and employing nearly 185,000 people. Find out how BNP Paribas Cash Management is using an Open Banking solution from Worldline to protect merchants from IBAN fraud in SEPA Direct Debit transactions.

A smart way to pay – direct from bank accounts across Europe

Direct debit offers consumers a convenient way to pay, especially for recurring services like utility bills or subscriptions. In the Single European Payments Area (SEPA), which covers 36 countries and territories, SEPA Direct Debit (SDD) is used in more than 20 billion transactions every year. SDD ensures consumers make their payments on time and helps businesses optimise their reconciliation and cash flow. For many merchants with European growth ambitions, SDD is a key part of their payment strategy.

BNP Paribas Cash Management plays a significant role in the realm of SDD, enabling businesses to collect domestic and cross-border payments across Europe. Its EasyCollect solution centralises and automates the SDD management process in a single user-friendly tool for the bank’s customers. To prevent fraud, BNP Paribas decided to integrate an innovative offering from Worldline into this SDD solution.

Time to take action on IBAN fraud

When choosing to pay by direct debit, customers first need to give a merchant permission to debit their account. They do so by entering their name, address, and bank account details in a so-called SDD mandate, using their IBAN (International Bank Account Number).

It’s not a number many people have in their head, so mistakes can be made. Worse, fraudsters can maliciously enter someone else’s IBAN. They can then receive a product or service, with payment taken from a bank account that is not theirs. Under the terms of the SDD scheme, merchants are required to refund the money to the defrauded customer.

Whatever their line of business, a merchant is at risk of incurring significant costs and losses. According to the Banque de France, more than 60% of fraudulent direct debits are the result of misuse of an IBAN. BNP Paribas decided it was time to take action.

A new way to validate accounts for SEPA Direct Debit transactions

BNP Paribas wanted a better way of verifying that a customer is the owner of the IBAN on the SDD mandate.Enter Account Validation from Worldline.

This Open Banking solution transforms the customer journey and delivers a whole new level of security.

When a consumer selects SDD to pay for a service on a merchant’s website, an intuitive interface will guide them to choose their country and bank. They are redirected to their banking website or app where they log in following the usual Strong Customer Authentication (SCA) procedures. Worldline’s Account Information Service (AIS) then retrieves their banking details and automatically enters the customer’s IBAN on the mandate, which the customer then signs electronically.

This new process significantly reduces the risk of human error and fraud.

To consolidate its position as a European leader in global cash management,BNP Paribas has integrated this white label service into its EasyCollect platform, enhancing its offer to merchants and strengthening customer loyalty.

‘We were looking for an innovative solution to reduce IBAN fraud in SEPA Direct Debits and found it in the new account validation functionality of Worldline’s SEPA Payment Suite, which is based on the latest innovative technologies and Open Banking opportunities. By implementing Worldline’s innovation in our existing SEPA mandate and direct debit solution EasyCollect, the risk of SDD fraud will be reduced and customer loyalty will be strengthened, which is a huge benefit for our clients and their customers.’, says Bruno Mellado, Global Head of Payments and Receivables, BNP Paribas.

Stronger security with reduced processing costs

Good for…merchant customers of BNP Paribas Cash Management:

  • even higher security when accepting payments directly from bank accounts across Europe;

  • lower expenses for investigating rejected payments and lower processing costs, with fewer refused transactions, refunds, and reversals.

Good for…consumers:

  • a user experience that is smoother, simpler, and more secure than ever.

BNP Paribas has already implemented the solution in Germany, Italy, and France and plans to roll it out in more countries. As befits one of Europe’s largest banks, the solution will help spur cross-border commerce and contribute to the goals of the European single market.

About Worldline

Worldline is a global leader in the payments industry and the technology partner of choice for merchants, banks, and acquirers.Worldline is a global leader in the payments industry and the technology partner of choice for merchants, banks, and acquirers. Powered by 18,000 employees in more than 40 countries, Worldline provides its clients with sustainable, trusted, and innovative solutions fostering their growth. Services offered by Worldline include instore and online commercial acquiring, highly secure payment transaction processing and numerous digital services. In 2022 Worldline generated a revenue close to EUR 4.4 billion. 

About Yohan Rivoirard

Yohan Rivoirard, a dedicated professional serving as a Solution Sales expert at WorldlineYohan Rivoirard, a dedicated professional serving as a Solution Sales expert at Worldline, has played a pivotal role in fostering the growth of the Open Banking department over the past five years. In his capacity as Solution Sales, he assumes responsibility for overseeing pre-sales activities within the Open Banking domain. Yohan adeptly bridges the gap between various teams, including sales, marketing, delivery, and product, fostering seamless collaboration. His commitment extends to sharing in-depth knowledge of the subject, both internally and with valued customers, contributing significantly to the success and advancement of Worldline's Open Banking initiatives.

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Keywords: SEPA Direct Debit, fraud management, Open Banking, PSD2, IBAN, financial services, cash management, customer experience, banks, merchants
Categories: Fraud & Financial Crime
Companies: BNP Paribas, Worldline
Countries: World
This article is part of category

Fraud & Financial Crime

BNP Paribas



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