Australian Payments Clearing Association Limited

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Australian Payments Clearing Association Limited

• Cheque Printer Accreditation Scheme?
• Michael Forey
• Director, Project Management Operations

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Presentation Outline

• Overview of APCA
• Cheque Printer Accreditation Scheme
• Drivers
• CPAS objectives
• Current status
• What is CPAS?
• The way forward
• Communications

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APCAs Role in Payments Clearing
APCAs role is to manage and develop the
Australian payments clearing system by setting
policies, rules and procedures for payments
clearing, by co-operative agreement among its
members. APCA does not operate the payments
clearing system. Individual members conduct
their own clearing operations (or outsource to
others).
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APCAs Structure

• APCA is a company owned by its shareholders, the
  organisations which clear and settle payments in
  Australia
• Banks, building societies, credit unions.
• Within the company structure, five clearing
  systems, each with its own Rules
• membership governance (Regulations)
• technical procedures standards necessary to
  participate (Procedures)

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Payment Clearing Systems

• Different payment instruments are cleared under
  the rules of the five different systems
• Australian Paper Clearing System (APCS)
• Bulk Electronic Clearing System (BECS)
• Consumer Electronic Clearing System (CECS)
• High-Value Clearing System (HVCS)
• Australian Cash Distribution Exchange System
  (ACDES)

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APCAs Objectives

• Preserve the integrity of clearing systems
• Identify and control settlement risk
• Improve effectiveness efficiency of payments
  clearing
• Identify put in place industry measures to
  combat payments fraud

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APCAs Objectives

• Facilitate co-ordination of payments clearing
  arrangements
• Ensure equity competitive neutrality in
  determining participation
• Engage interested bodies in payments clearing
  discussion (eg payment users, vendors, service
  providers etc)
• Assist community understanding of payments

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Cheque Printer Accreditation Scheme?

• CPAS

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CPAS Drivers

• Cheque Fraud - a growth industry!
• Counterfeit fraud, significant increasing
• Fraudulent alteration of cheques, significant
• Large number of cheques processed manually owing
  to poor MICR or paper.
• Major cost to finance industry, and is therefore
  cost of service to customers

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CPAS Objectives

• Reduce cheque fraud
• Improve quality of cheque printing
• Improve cheque processing efficiency - more
  cheques processed electronically (ie no manual
  intervention required)
• Ensure all components of cheque printing process
  (end-to-end) are secure
• Fair criteria for participation

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CPAS - Current Status

• Committee approval and funding for planning phase
  of CPAS project
• Define high level business requirements
• Business case assessment
• Develop project plan
• Industry working group established
• Representatives from APCA Members
• Printing industry (Xplor SPA, among others)

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What is CPAS?

• Scheme to accredit cheque printers and to
  ensure adherence to industry agreed standards in
  the printing of cheques.
• Who needs to be accredited?
• What components will accreditation cover?
• Who will administer CPAS?

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Who needs to be Accredited?

• Open to all companies engaged in
• Printing of cheque forms (with or without MICR)
  
• Printing MICR on pre-printed forms.
• Not intended to cover companies engaged in
• Print broking
• Design of cheque forms
• Production of cheque paper (paper mills)
• Companies infilling payee/amount only.

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What components will Accreditation cover?

• Equipment Materials
• Premises Security
• Process Security
• Order Processing
• Quality Assurance
• Despatch Delivery

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Equipment Materials

• Accreditation will be on the basis that the
  cheques produced are of sufficient quality and
  that they meet set standards

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Premises Security

• External security (prevention of unauthorised
  access)
• Internal security (appropriate restrictions on
  access to different areas)

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Process Security

• Process controls in place end to end (eg from
  raw materials, through work-in-progress, to the
  finished product)
• Full audit trail in place for each print job
• Destruction process for unused/damage stock
• Protection of confidential information
• Employee screening and confidentiality clauses

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Order Processing

• Cheque order validation
• Conformance to DAN/PAN processes
• (Samples assessed and approved by the financial
  institution)

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Quality Assurance

• Knowledge of and conformance to APCA publications
  standards
• Evidence that appropriate quality assurance
  processes in place

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Despatch and Delivery

• Secure auditable despatch system
• Appropriate sign-off for delivery
• Reliable and secure transport arrangements
• Secure packaging
• Appropriate labelling (not to identify as
  cheques)
• Process for lost/stolen consignments

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Who will administer CPAS?

• APCA to administer scheme
• Rules operating regulations
• Accreditation process
• Scheme issues
• Help desk
• Reporting
• Inspectorate
• Appeals process (possibly with arbitration)

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The Way Forward

• Committee decision point (planning phase)
• Business case stacks up
• Project plan approved
• Consider any Trade Practices implications
• Scheme design implementation phases
• Accreditation of printers
• Transition period

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Communications

• Engage printing industry in project
• Recent correspondence to printers registered on
  APCA data base
• SPA/Xplor conferences road-shows
• Regular updates on progress
• - APCA web-site www.apca.com.au

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Communications

• Printing industry feedback
• Working group representation
• Printing Industry Associations
• Printing industry forums
• Other means of obtaining printing industry
  feedback?