HISTORY OF THE EPS PROJECT

EPS Components

HISTORY OF THE EPS PROJECT 2005

The EPS implementation was TRANSFOND’s major achievement since its establishment and continues to be to date too.

FINANCING

The Electronic Payments System (EPS) was implemented via a project jointly financed by the European Union -through the PHARE programme - and the Romanian banking community – through TRANSFOND. 

The project was financed by the European Commission with €8.04 million. The community funds were used mainly to purchase IT applications, technical assistance to build the technical infrastructure of the system and technical assistance to adapt the legal framework. 

The co-financing of the project was provided by TRANSFOND, on behalf of the Romanian banking community. The resources were used to purchase the main premises of the Electronic Payments System, hire and install the secondary premises (back up for disaster recovery), purchase equipment for the central systems, the communication equipment for central systems as well as for all system participants.

PROJECT STRUCTURE

EPS was designed as a modular system with three components integrated via automated interfaces:

• the RTGS system  – the real-time gross settlement system (for large value payments).
• the ACH system – the automated clearing house (for low-value payments);
• the GSRS system – the system for registering and settling operations with government securities.

ORGANIZATION

The system implementation was provided by a mixed team made up of 46 experts from the National Bank of Romania and TRANSFOND. 
The team was structured in 8 working groups, namely: RTGS, ACH, GSRS, Regulations, Training, Participant preparing, Information Technology and Communication.

ACTIVITIES AND STAGES

During the project for the implementation of the electronic system, a number of activities specific to a project of this type and of such complexity were deployed, as follows:

• defining the requirements and subsequently the functional and technical specifications for the entire EPS infrastructure;
• purchasing, adapting and/or developing IT applications underlying the three systems;
• purchasing, installing, configuring and testing the equipment for central systems, both for the main premises, as well as for the alternative one;
• drawing up the test documentation (scenarios and test cases);
• testing each application individually (in two stages: pilot test and acceptance test);
• integrated testing for the validation of interfaces among the three systems;
• parallel run tests (to compare the results with the real existing environment), volume and overload tests;
• drawing up the ESP underlying documentation (manuals, technical documents etc.);
• implementing the private data network (by which the on-line system monitoring is conducted) managed by TRANSFOND;
• installing communication equipment at participants’ locations;
• implementing the SWIFT network for two of the systems (RTGS and GSRS);
• connecting the central systems RTGS and GSRS to SWIFT;
• installing the buildings of the Electronic Payments System;
• training almost 900 people from commercial banks, the National Bank of Romania, TRANSFOND, the Bucharest Stock Exchange, SNCDD, the Ministry for Public Finance;
• drawing up, amending or supplementing the legal and contractual frameworks necessary for the EPS going live:
• • the regulation on the IBAN coding was issued,
  • the directive on the finality of settlement was implemented;
  • the directive on financial collateral agreements was implemented;
  • the system rules for the three modules;
  • the regulation for payment orders and the direct debit regulation;
  • conclusion of the contracts with the EPS suppliers and participants.
• technical certification of participants.

The implementation was completed only after two years since the project kick off, a very short time for a project of such scope. The outcome, EPS, has the qualities of a state-of-the-art system, benefiting from state-of-the-art technology and the experience accumulated by European countries where the team that implemented the project went on study tours.