Agency Clearing Service User Guide for Sterling Cheque and Credit Clearing Services

Image Clearing System (ICS) Version 3.0 1 Contents 4.7 Data Files 15 4.7.1 File delivery mechanism 16 Contents 4.7.2 File Naming Convention 16 1 Contents 2 4.7.3 Connectivity Guides 16 2 Cheque Image Clearing – Scheme Overview 3 4.7.4 File Timing 16 3 Barclays Indirect Participant Service Overview 3 4.7.5 File Split 16 3.1 Features 3 4.8 Service Level Controls (SLCs) 16 3.2 Advantages 3 4.9 Dual Running 17 3.3 Overview of Service/Solution components 4 4.9.1 Transition period 17 3.3.1 iPortal 4 4.9.2 Duplicate Checking 17 3.3.2 Agency Pay 4 5 Credit In-clearing Transitional Solution 17 3.3.3 Cheque and Voucher Image Archive 4 5.1 Credit In-clearing 17 3.3.4 Data Files 4 6 Research and Adjustments 17 3.4 Credit In clearing – Tactical Solution 5 6.1 ICS approach 17 4 Procedures – Debit in-clearing 5 6.2 Process 18 4.1 iPortal 5 6.2.1 Information Required when Calling the R&A Help Desk 18 4.1.1 Accessing iPortal 5 7 Contingency 18 4.1.2 User Roles and Admin Control 5 7.1 Incidents within your own systems and infrastructure 18 4.2 Agency Pay 6 7.2 Service Incidents with Barclays Image Clearing Service 19 4.2.1 Accessing Agency Pay 6 7.3 Contact Points 19 4.2.2 Making a payment decision 6 8 Appendices 19 4.2.3 Viewing an image of the cheque 8 8.1 Agency Pay Screens 19 4.2.4 Checking a duplicate 9 8.1.1 Summary screen 19 4.2.5 Making bulk pay decisions 11 8.1.2 Payment decision screen 20 4.2.6 Resetting 12 8.1.3 Payment decisions 22 4.2.7 Submission 12 8.1.4 View details screen 24 4.2.8 Exporting data 13 8.1.5 Compare duplicates screen 25 4.3 Settlement and Default Decisioning 13 8.2 Standard unpaid answers 25 4.3.1 Settlement 14 8.3 Industry Service Level Controls (SLCs) 26 4.3.2 Default Decisioning 14 8.4 Reference Documents 27 4.3.3 Funds Availability 14 4.4 Fraud Reporting 14 9 Glossary 27 4.5 Current Account Switching Service (CASS) 15 4.5.1 You are the New Paying Bank 15 4.5.2 You are the Old Paying Bank 15 4.6 Image Archive 15

2 2 Cheque Image Clearing – Scheme Overview *exceptions: there are two NI Bank Holidays (St Patricks Day and Orange Day) where payment decisions from banks located in Northern Ireland will be delayed by one day. With nearly half a billion cheques written in 2016, it is vital that the UK’s Cheque clearing process is robust, reliable and secure. With this in mind, and to ensure that the future of This guide outlines the process that you need to follow to be compliant with the ICS scheme the Cheque is protected for as long as customers want to use them, the Cheque and Credit rules as an indirect in-clearing participant i.e. acting as a “Paying Participant” and/or a Clearing Company (C&CCC) is introducing a new and quicker way of clearing Cheques that “Beneficiary Participant” for eligible items deposited at locations other than your own. uses 21st century technology. 3 Barclays Indirect Participant Service Overview Called the Image Clearing System (ICS), the proposed new method will revolutionise how Barclays Agency Clearing Service is available to financial institutions, and as an agency cheques are cleared in the UK. It will mean that cheques will be cleared using a digital image of customer enables you to use a unique sort code, clear cheques, and in turn offer your own the cheque rather than via the current paper-based clearing system where the physical paper customers an account on which cheques can be drawn, paper credits received and automated cheque is transported around the country to be cleared. entries passed. In return, as a customer of the Agency Clearing Service you take on the The new system is due to go live with some banks and building societies from 30 October 2017. responsibility of complying with the C&CCC regulations and Barclays own rules contained Then, at some stage during the second half of 2018, all of the UK’s banks and building societies within this document. will clear all cheques via the image-based system to the faster timescale. 3.1 Features One of the main benefits of an image-based system is that the cheque clearing process is • You are issued with your own sort code number(s) from the Barclays range faster than the paper-based clearing, so cheque recipients will have access to the money in • The service provides full access to the UK clearing bank network their accounts more quickly. However, this does also mean, the person or business who wrote the cheque will find that the money will leave their account in a faster timescale too. • You carry out your own final processing, unless other arrangements have been made, including the debiting/crediting of your customers’ accounts The ICS will speed up the time it takes a cheque to clear from six weekdays to the next • Cheques are printed with your own design/logo. weekday (bank holidays excluded). This means that if a cheque is paid in on a weekday (before the collecting bank’s cutoff time) the cheque must be cleared by 23:59 on the next weekday 3.2 Advantages (bank holidays excluded). The high level overview of the scheme is as follows: • Improves corporate image

• Items (cheques and credits) are deposited into the image clearing scheme on Day 1 by the • An agency customer projects the image of being a full UK clearing bank in its own right. “Collecting Participant” No mention of the Barclays name is required on cheques, credits or other stationery

• The “Paying Participant” is required to make a pay / no pay decision on all debit items on • The service avoids additional costs associated with full membership of the clearing system

Day 2 * • Although you avail yourself of all the clearing services, Barclays is actually acting as your • “Beneficiary Participants” must make funds available to their customers no later than 23:59 “sponsor”

on Day 2 for value and withdrawal. At the same time the customer receives “certainty of • You are able to offer services such as bank accounts and cheque books directly to your fate”. customers.

3 3.3 Overview of Service / Solution components • view a summary of the cheques requiring payment decisions today (both number and 3.3.1 iPortal value) iPortal is Barclays’ single point of access to Digital services for our Corporate customers. • view how far through the current day’s clearing process you are. It provides a consolidated work-list for a single view of outstanding tasks, alerts and secure 3.3.3 Cheque and Voucher Image Archive communication supplementing our personal relationship model; and a gateway to specialised solutions, all from a single login. The Cheque and Voucher Image Archive gives you online access to images of cheques that have already passed through clearing. This is a standard service available through iPortal, but In terms of Agency Bank in-clearing services under the ICS, you will require access to iPortal will include images of cheques that are cleared through the ICS. The service allows you to: which will provide: • View images of cheques that have been through clearing • Access to the online components of the Agency Bank solution, Agency Pay and the Cheque • Print and save the images of these cheques. and Voucher Image Archive

• Access to tools that allow you to manage how you use and control the service 3.3.4 Data Files

• The ability for you to control what your individual business users have access to You have the option to receive data files with your debit and credit information to support automation of processes at your end. • A single sign-on for your business’ users giving access to all the services you have given them access to. The data files will be in the ICS Industry format (XML file format), however If you are already registered to receive data files for the paper scheme, you have an option to receive the image 3.3.2 Agency Pay item data in Standard Barclays format (flat file format) as well. Agency Pay provides you with the mechanism to make payment decisions on cheques issued by your customers or by yourself using your agency sort code and cleared under the ICS. The industry format provides more information relevant to the ICS scheme. Refer to the This is an online service accessible through iPortal and provides the ability to: Data File Specifications for more details.

• View data and images for all cheques on which payment decisions must be made on the The following data files are available: current day • Debit in file (XML and Standard Barclays format) • make payment decisions on each cheque • Credit in file (XML and Standard Barclays format) • quickly set the payment decision for a large number of cheques to ‘Pay’ • Payment Response file (XML File format only) • trigger when Barclays return payment decisions to the ICS

• separate who makes the payment decisions and who triggers the payment decisions being The data files will be delivered by 02:30; day 2 for Debit and Credit in. The payment response returned to the ICS files be available latest by 16:30 on day 2

4 3.4 Credit In clearing – Transitional Solution • Decision Maker – as viewer plus can make individual payment decisions and bulk The launch of the full credit in-clearing service is expected to commence in March 2018. pay decisions A manual process will therefore be introduced from 30th October 2017 until the full service is • Enhanced Decision Maker – as decision maker plus can export data introduced (Section 5). • Submitter – as viewer plus can submit items to Barclays (so trigger responses being sent 4 Procedures – Debit in-clearing to ICS and debits being applied to the NOSTRO/settlement account based on paid items included in the submission). The operating instructions which follow include relevant provisions of the Cheque and Credit Clearing Company Image Clearing System Rules. All reference to the ‘settlement account’ refers 4.1.2.2 Custom Role Profiles to the account to which entries are debited and credited. Custom role profiles allow the creation of roles that vary from the default profiles. The most

4.1 iPortal significant difference between default and custom profiles is the ability to control role access to sort codes with custom profiles. 4.1.1 Accessing iPortal iPortal is your single access point to your digital banking products and services. For example, where a customer has two sort codes that are managed by different areas within To access iPortal please follow the link - the business, custom profiles will allow the administrator to create different profiles for different https://iportal.barclays.com/olb/portalauth/login.do#/showdevice business areas so they can only make decisions on the items they are responsible for.

4.1.2 User Roles and Admin Control Custom role profiles can be built combining a set of access rights:

As Agency Pay is delivered as a service through iPortal, access control is managed following the • VIEWER – allows navigation through Agency Pay and view only access to all cheques the standard iPortal approach. This means that you will have your own administrator who: user has rights to see. Base requirement and needs to be included in all custom roles

• Allocates roles to business users • MAKE PAYMENT DECISION – allows the user to make individual payment, bulk pay decisions and use the ‘Reset all’ function • Can create custom role profiles. • EXPORT – allows the user to export data based on search/filter criteria Agency Pay has 2 types of role profiles, default profiles and custom profiles. • SUBMITTER – allows the user to submit items to Barclays which triggers payment decisions 4.1.2.1 Default Role Profiles being returned to the industry switch and debiting the Agency Bank NOSTRO/Settlement

Default profiles provide access to all sort codes linked to the legal entity. The profiles are: account based on the value of items paid as part of the submission.

• Full Access – can perform all tasks available in Agency Pay

• Viewer – can navigate through Agency Pay, view details of all cheques that need payment decisions made for that day

5 4.2 Agency Pay 4.2.2 Making a payment decision

4.2.1 Accessing Agency Pay 4.2.2.1 Basic payment decision process

Agency Pay is a service delivered through iPortal. Therefore, to access the service, log into 1. From the Summary screen, click on ‘Search’, highlighted, which takes you to the Filter screen. iPortal and select Agency Pay from either Quick Links on the homepage, or from the ‘Create and amend’ menu.

This takes you to the Agency Pay Summary screen.

2. Enter the details of your search in the filter screen and click ‘Search’, highlighted, which will then display items that match the criteria set.

6 3. For each item displayed you can make a payment decision by changing the Pay/No Pay drop 6. To save the payment decision, either click ‘Apply’ to stay on the same page or ‘Apply & Exit’ down from ‘Pending’, the default status, to either ‘Pay’ or ‘No Pay’ which returns you to the Summary screen.

4.2.2.2 Using the workflow process

Agency Pay supports:

• Different checks being performed by different individuals/teams

• The ability to review and only make payment decisions on exception items (those most likely to be no paid) and bulk pay the non-exceptions. 4. If the decision is set to ‘No Pay’, you will need to select a no pay reason from the ‘No Pay Reason’ drop down that is now displayed. This is provided by including four optional dropdowns per cheque that allows the outcome of that check to be recorded. You do not need to use these check boxes, they are there to support your processing if needed.

The four checks are:

• Stop check – has the cheque been stopped

• Fraud/duplicate check – is the cheque fraudulent or has it already been through the clearing

• Participant duties check – has the cheque been completed correctly

5. If the No Pay Reason is set to ‘Suspected Fraudulent/Counterfeit Cheque discovered within • Funds check – does the drawer have sufficient funds to cover the value of the cheque. the clearing cycle’ then a fraud reason must be selected from the ‘Fraud Reason’ drop down. By default, each of these process checks will be set to ‘Pending’ but following internal checks you may want to change them to:

• Pass – this indicates that a review has been undertaken of an individual item or the bulk change from Pending to Pass has been actioned and therefore stops, fraud / duplicate, participant duties or funds (as appropriate) do not result in a no pay decision

• Fail – this check shows a cause to make a no pay decision

7 • Hold – means a decision cannot currently be made, so has to be deferred to later in the day. 3. The view details screen automatically shows the front of the cheque

1. To update any of the process check values on an item, follow steps 1 and 2 from the basic payment decision process.

2. Select a new value in the appropriate drop down list.

3. Then follow steps 3 to 6 of the basic payment decision process.

4.2.3 Viewing an image of the cheque 4. You can view the rear of the cheque by clicking ‘Rear View’ 1. In order to view the image of a cheque, follow steps 1 and 2 from the basic payment decision process.

2. Clicking the ISN value, highlighted blue, takes you to the View Details screen

8 5. Exit the page by clicking ‘Back’ at the bottom of the page. 2. To find any items that Barclays has flagged as suspect duplicates select ‘Suspect Duplicate’ in the filter criteria and then click search.

4.2.4 Checking a duplicate

Under ICS it is possible the physical cheque may not be deposited with a bank but collected by the payee using a mobile or remote imaging solution, so there is a risk that the same cheque may be presented to clearing more than once. Barclays performs duplicate detection against every cheque for which we receive a request to pay message. The system will flag a suspect duplicate where the:

• Sort code

• Account number

• Serial number and value all match the current item that has been presented.

It is possible for multiple matching items to be identified. If any suspect duplicates are identified, the item will be flagged as a suspect duplicate within Agency Pay. The following steps show you how to compare the current cheque image to the previous cheque image(s) 3. If there are no suspect duplicates, no cheques will be returned and an information window to determine whether it is a duplicate. will advise that no items matched the filter criteria.

1. Follow step 1 of the basic payment decision process. 4. Suspect duplicate items are displayed in the same way as other items except the Suspect Duplicate field will be set to ‘Yes’. This will be highlighted blue and when clicked will take you to the Compare Duplicates screen.

9 5. The suspect duplicate screen will display the current cheque and up to four other cheques 1. Account Details – shows the sort code and account number of the current cheque requiring that were identified as suspect duplicates. a payment decision and the old cheque being displayed.

2. Previous cheque details – shows basic details of the cheque that may be a duplicate that has already passed through the clearing. This will include the date of deposit and, where available, the channel the item was presented through and the payment decision.

3. Previous cheque image – an image of the previous cheque.

4. Front View/Rear View – allows toggling between viewing the image of the front of the cheque and the rear of the cheque

5. Rotate Left/Rotate Right – allows the cheque image to be rotated 90o left or right.

6. Zoom in/Zoom out – allows zooming in and out of the cheque image.

7. Current Cheque Details – shows basic details of the current cheque.

8. Front View/Rear View – allows toggling between viewing the image of the front of the cheque and the rear of the cheque.

9. Rotate Left/Rotate Right – allows the cheque image to be rotated 90o left or right.

10. Zoom in/Zoom out – allows zooming in and out of the cheque image.

11. Back – navigates back to the Payment Decision screen.

11 10 6. When you have decided whether the current cheque is a duplicate or not, click ‘Back’ to 2. Clicking ‘Set to Pass’ will change all currently ‘Pending’ items to ‘Pass’ for the process check return to the Payment Decision screen where you can record your decision. (which can be seen if you find the item on the Payment Decision screen).

4.2.5 Making bulk pay decisions

Bulk pay decisions allow you to avoid having to review and update each individual item with Pay/No Pay decision. Having identified the items that require a review and you are therefore more likely to No Pay, the remaining items which do not need a review can be quickly set to Pay. 3. When you want to bulk pay items, click the ‘Set to Pay’ button. This is achieved in two stages:

• Changing the process check flags from ‘Pending’ (showing the item has not been updated yet) to ‘Pass’ (indicating the check has been completed and there is not a reason to ‘No Pay’ the cheque)

• Changing the ‘Pay/No Pay’ decision from ‘Pending’ to ‘Pay’ where all four of the process checks are set to ‘Pass’.

This is achieved by: 4. You will be asked to confirm you wish to proceed before the changes are applied. 1. When all the exceptions for a particular process has been completed click the appropriate ‘Set to Pass’ button. 5. The summary section of the Summary screen will update to show which items now have a ‘Pay’ decision but have not yet been submitted.

11 4.2.6 Resetting • The debit will be applied to the NOSTRO\Settlement account associated with the There is also an option to ‘Reset All’ items on the Summary screen. sort code • The summary section of the Summary screen will be updated with

• the number and value of ‘Pay Items Awaiting Submission’ being added to the ‘Pay Items Submitted’ totals, and When ‘Reset All’ is clicked, all items that have not yet been submitted will have their values reset to the start of day values. That means: • the number and value of ‘No Pay Items Awaiting Submission’ will be added to the ‘No Pay Items Submitted’ totals.

• All process check values will be reset to ‘Pending’ • Successfully submitted items will be locked so can no longer be updated. • All Pay/No Pay values will be reset to ‘Pending’ A number of factors determine how quickly this process completes (how many items need • The summary will update and the number and value of ‘Pay Items Awaiting Submission’ to be processed, how busy the Barclays Clearing Hub is, how busy the ICS is). The on-screen and ‘No Pay Items Awaiting Submission’ will revert to 0 and the values previously held will completion is acknowledgement the request has been received and will be processed. The be added back into the ‘Pending Items’ values. actual processing continues after you have received the acknowledgement.

When you click ‘Reset All’ you will be asked to confirm you want to proceed. A funds check is also performed on submission and if there are insufficient funds to cover the total value of the ‘Pay’ items you will be notified and the submission rejected. As mentioned 4.2.7 Submission above, this will take place after we have acknowledged the request to submit and you will Submission is an action available from the Summary screen by clicking ‘Submit’. receive a notification. All items that were submitted will revert to their pre-submission status, so are open to be updated or re-submitted (Section 4.3.3).

Submission triggers a number of actions:

• All ‘Pay Items Awaiting Submission’ and ‘No Pay Items Awaiting Submission’ will be submitted to Barclays

• Barclays will send the payment decisions to the ICS for onward transmission to the beneficiary bank

• Barclays will debit your NOSTRO\Settlement account for all the items that have a ‘Pay’ decision. The debit will be:

• A single debit per sort code (per submission) (Section 4.3)

12 4.2.8 Exporting data The export includes the following data items:

Agency Pay provides the option to export the current day’s data into a Comma Separated • Processing date Variable file, a text format that can be loaded directly into most spreadsheet programmes. The export is available as part of the filter criteria on the Payment Decision screen • ISN

• Debit Sort Code

• Debit Account number

• Debit Serial number

• Value

• Suspect duplicate flag (pre-populated)

• Suspect fraud flag (pre-populated)

• Stops check flag

• Fraud/Duplicate check flag

• Participant duties check flag

• Funds check flag

• Payment decision

• No pay reason code

• Submission status

The data exported is based on the Filter Criteria that have been set. If you want all the current • Beneficiary details day’s data to be included, do not set any criteria. • Collecting bank

The data covers items that need payment decisions to be made on the current processing day. • Collecting channel The data shows the current state of the item (e.g. if any process checks have been completed, • Collecting outlet if there has been a payment decision made) and therefore changes throughout the processing day. The data is also available after the cut-off time so can be used to maintain a record of • Switched account all the payment decisions that have been made. NB: the data is only available for the current • Old sort code processing day. • Old account number

13 4.3 Settlement and Default Decisioning • Where we are able to identify a No Pay decision with a ‘No Pay’ reason code we will submit 4.3.1 Settlement a ‘No Pay’ response.

During the dual running period the settlement process for items presented through the paper • For all other items a default pay decision will be applied (Please see section 4.3.3 Funds clearing process will not change i.e. a single net amount will be passed to your settlement Availability) account held with Barclays, representing the settlement for your Paper and Bacs in-clearings. 4.3.3 Funds Availability

For items presented via ICS your settlement account will be debited for each submission On receipt of a submission of ‘Pay’ responses or application of the default process at through Agency Pay that includes one or more Pay decisions. 15:00 a check on available funds will be undertaken on your settlement account. If there are insufficient funds the following will occur depending on the time the funds check is For all defaulted pay decisions – see section 4.3.2 (NB reliance on applying default decisions on undertaken: a business as usual basis is not recommended). • Submission of responses prior to 15:00 – you will be notified of the rejection of the Settlement for ‘Pay’ decisions will be applied to your settlement account for the total value of submission to allow the issue to be resolved Once funds are available you will need to each submission. Multiple submissions will lead to multiple settlement entries. re-submit your responses. NB you may update individual ‘Pay’ and ‘No Pay’ decisions prior to re-submission For Agency Banks with multiple sort codes, separate entries will be passed per sort code. • Default decision applied at 15:00 – all un-submitted payment decisions will default to ‘No Pay’ regardless of the status within Agency Pay, i.e. if there are sufficient funds the For example, if you have two sort codes: Where a submission in Agency Pay includes 10 ‘Pay’ default decision will be changed from Pay to No Pay. No pay reason of code 47 (Agency payment decisions which includes: Bank payment prevented) will be applied to each item. These ‘No Pay’ decisions will be irrevocable. • 8 ‘Pay’ decisions for sort code 1, total value of £80 4.4 Fraud Reporting • 2 ‘Pay’ decisions for sort code 2, total value of £100 Items that are returned unpaid with an appropriate fraud reason will be automatically updated • This will lead to 2 debits on the Settlement account, one for £80 and one for £100 within Kappa. 4.3.2 Default Decisioning Where you have paid an item which subsequently is confirmed to be a fraudulent item, or you The ICS scheme requires a ‘Pay’ or ‘No Pay’ response for every item on the day of presentation. have returned an item with a fraud reason that is subsequently discovered not to be a fraud you Failure to submit a ‘Pay’ or ‘No Pay’ decision will lead to a default decision being applied. It is must advise us using the email address listed in the contact points (section 7.3). not recommended to rely on the default decision being applied. Details required are:

To meet the scheme cut off and avoid the ICS applying default decisions all payment decisions • Item paid but subsequently confirmed as a fraudulent item, or Item not paid as a fraudulent must be recorded and submitted to Barclays by 15:00. item but subsequently confirmed a genuine item

At 15:00 Barclays will review any items that have not been submitted. • Date of presentation

• Sort Code 14 • Account Number You will need to:

• Serial Number • login to the Filehive service • Amount • download the Cheque Re-direction Information form 4.5 Current Account Switching Service (CASS) • investigate whether the cheque has previously been paid or stopped Where you are a member of CASS, the ICS will flag items that are account switched and route • update the Cheque Re-direction Information form them to the new bank based on the information held by CASS. ICS is working with the CASS scheme to implement a permanent solution, but until this is delivered a temporary solution • upload the updated form back onto the Filehive service has been implemented across the CASS participants. This section explains the temporary 4.6 Image Archive processes where you are either the ‘old’ or ‘new’ participant. Cheque & Voucher Image archive is a standard service available through iPortal that provides

This section will be updated when the ICS implements its permanent solution. access to images of all cheques and vouchers that have passed through clearing in the previous 90 days. 4.5.1 You are the New Paying Bank The service provides the ability to view, print and save a copy of the images. If you are unable Account switched items will be flagged within Agency Pay by setting CASS to ‘Yes’ (Sections to view these images please check your browser settings. 8.2.3 and 8.2.4). To assist with identifying items that have been switched you can filter on the

CASS field within Agency Pay. NB your payment decisions are not included with these images. Please refer to 4.2.8 Exporting Data to record the payment decisions on the day of presentation. Upon identification of an item that has been redirected to you as the New Bank you will need to complete a Cheque Re-direction Information form and send it to the old participant by using If you need to access an image that is older than 90 days, you will need to contact your Barclays the C&CCC Filehive site by 10:00 at the latest. When the Old Bank receives the form, they will support team who can arrange for a copy of the image to be retrieved. Images will be retained have to check to see if the cheque presented to the New Paying Bank has been: for six years in accordance with legal requirements.

• Stopped, or 4.7 Data Files • Previously paid The following data files will be available to support image clearing,

The Old Bank will complete the form and send it back to you using Filehive. This response 1. Image based debit in-clearing (XML or Flat file formats) will assist you with making a payment decision which should be submitted using Agency Pay. You should receive the updated form from the Old Bank by 13:00. 2. Image based credit in-clearing (XML or Flat file formats)

4.5.2 You are the Old Paying Bank 3. Image based payment response file (XML format only). When you are the old Bank, you will receive a notification by email from the Filehive service for a cheque drawn on an account that has now switched away from you. NB the cheque will not These files will be separate to the current paper clearing files. If you are signed up to receive be displayed within Agency Pay. paper files you will continue to do so until the paper scheme is withdrawn.

15 The detailed technical specification for XML format can be found in the document Image • Image based credit in-clearing (XML or Flat file formats) – by 02:30 (Day 2) clearing data file specifications - Detailed v1.0. • Image based payment response file (XML format only) – by 16:30 (Day 2)

The detailed technical specification for flat file format can be found in section 6 of the Barclays will meet these timings provided all credit and debit transactions files (MSG 05 & MSG document DirectData Customer Manual. 06) from the ICS would have reached Barclays clearing hub by 00:30 on Day 2 and by 16:00 on Day 2 for Payment response file (MSG 13). Barclays can provide both data file formats (XML AND Flat file) for image items if required. (Please note separate charges will apply for these files) 4.7.5 File Split

Due to size restrictions, the data files in xml format will be split after every 2400 records. The 4.7.1 File delivery mechanism file names will be unique for each file. 4.7.1.1 Protocols You have an option to receive multiple files for different combination of sort codes. You have an option to receive the files in via the following protocols.

4.8 Service Level Controls (SLCs) • Connect Direct There is an overall scheme requirement that all presented items must have a payment decision • SFTP returned on Day 2 of the clearing cycle without exception. If a payment decision is not received • FileAct SwiftNet. at the ICS by 15:30 then the ICS applies a default ‘Pay’ decision. (Section 4.3.2 and 4.3.3)

4.7.1.2 Barclays Infrastructure for file delivery With the move to the ICS, the industry has set out a set of Service Level Codes that will be monitored, and to which participants must adhere. The SLCs Barclays Agency Banks must Your connectivity can be set up either via the Barclays Filegateway interface or the DTU interface. adhere to are:

Your on-boarding manager/implementation manager can provide you more details on which SLC cut-off time Payment decisions to be at Barclays set-up best suit your needs. 09:301 70% 4.7.2 File Naming Convention 11:30 85%

The file name will be an alphanumeric character and can have the date of file creation in the file name. 14:00 95% If you receive paper files, Barclays will ensure the names are unique for paper and image based files. 14:30 99% 15:002 100% 4.7.3 Connectivity Guides

1. Refer to our file connectivity guides for the details on the file naming convention.(Section 8.4 The 09:30 SLC will only apply to customers where the average daily volume of items is greater Reference documents). than 2,000.

2. 4.7.4 File Timing These SLCs are imposed by the ICS. If any items have not had decisions submitted in Agency Pay at 15:00 a default decision will be applied (Section 4.3.2 and 4.3.3). • Image based debit in-clearing (XML or Flat file formats) – by 02:30 (Day 2) 16 4.9 Dual Running • Items submitted via the Image Scheme and subsequently via the Paper Scheme will be 4.9.1 Transition period notified to you by email. The paper cheque will be delivered to you via the current Paper process. The image will be available via the ‘Cheque and Voucher Image Archive’. Confirmed When ICS goes live there will be a transition period of up to a year where both paper and image duplicate must be returned unpaid using the existing Paper Scheme process but using the clearing schemes run in parallel. Initially low volumes will be processed through ICS gradually no pay reason code “Stop-Duplicate cheque” (while not a reason within paper clearing, increasing through the transition period until all cheques and credits are processed through the C&CCC have requested this code be used for paper duplicates during the transition period). image scheme and the paper scheme will close. NB: Keep in mind a duplicate may be a re-presented item. This approach means there are a number of impacts: 5 Credit In-clearing Transitional Solution • Settlement for the image and paper clearing will be different. Paper settlement will 5.1 Credit In-clearing continue as at present but image settlement will accelerate and create separate entries. Please see section 4.3 for further details On launch of ICS it is not anticipated many, if any, credit-out items will be submitted by Barclays or other banks. A full in-clearing service will be implemented in due course, but prior to this we • New channels for collecting cheques will be introduced, some of which may (such as are implementing a transitional credit-in clearing solution to ensure that any credits that we do mobile) mean the customer retains the physical cheque. This means it is possible for the receive are advised to you. cheque to be deposited through multiple channels (whether deliberately or accidentally) so duplicate checking becomes important. The transitional process will be: 4.9.2 Duplicate checking • We will notify you of any credit in clearing item we receive for you by secure email Duplicates can arise for items being cleared through the image scheme or the paper scheme. Barclays will perform a check against code line and amount for all cheques passing through • We will post an uncleared credit to your settlement account paper or image clearing and will flag items that are suspected to be duplicates to you. • We will notify you when we receive the payment decisions relating to the items deposited with the credit, at the latest by 16:30 on day 2. • Items submitted multiple times via ICS will be flagged within Agency Pay. The image of the duplicates will be available within Agency Pay. Confirmed duplicates must be returned In the event of a ‘No Pay’ decision, we will post a reversing debit to your settlement account. unpaid, using no pay reason code “Stop-Duplicate cheque” (Section 4.2.4) 6 Research and Adjustments • Items submitted via the Paper Scheme and subsequently via the Image Scheme will be 6.1 ICS approach flagged within Agency Pay. The image of the cheque presented via the Image Scheme will be available within Agency Pay while the image of the cheque presented through the The ICS will implement a permanent solution but from the go live date will be using a paper scheme will be available within the Cheque and Voucher Image Archive. Confirmed transitional solution which is effectively continuing with the current processes. duplicates must be returned unpaid within Agency Pay, using no pay reason code “Stop- This means: Duplicate cheque” (Section 4.2.4)

• Settlement will continue as today (strategic settlement is likely to be on a case by case basis)

Cases will be managed outside of the ICS.

17 6.2 Process • Caller’s details

If you have paid an item which requires adjustment, you should raise an R&A case as follows: – Name

• Contact the R&A Help Desk at iPSL by 12:00 with your “Response to Clearing” notification. – Telephone Number

• The R&A Help Desk will create a case in their case management system and provide you – Fax Number with a unique case number. • Your reference number (assigned by you)

• If applicable (see table below) supporting documentation should be faxed to the Help Desk • Copy of the item to be sent to the Help Desk (fax no. 01604 665 425 or 01604 665 477) quoting the case number provided during the call. Supporting information should be faxed immediately after the call to the following Help Desk • All adjustments that are reported by 12:00 will be passed to the Agency Bank’s account by fax number: 01604 665 425 or 01604 665 477 15:00 the same day. The Agency Bank should include the following information on the fax: • If you report an adjustment after 12:00 the correcting entry may not be passed until the following day by 15:00. • iPSL Case Number • Any query on an adjustment should be reported to the R&A Helpdesk, quoting the Case Number. • The Agency Query Reference Number • Escalation is via the normal BAU process into the Barclays Servicing Team. • Copy of the front and back of the item • The original settlement value will be retained and a second entry will be passed for the 7 Contingency amount of the adjustment only. 7.1 Incidents within your own systems and infrastructure 6.2.1 Information required when calling the R&A Help Desk The ICS requires a payment response on every item presented for payment on Day 2 of the When calling the R&A helpdesk you will require the following information: clearing cycle and it is not possible to hold these over. In the event you are unable to access Barclays’ systems due to an incident with your own systems and infrastructure such that you • Agency Bank Name cannot access the Barclays Image Clearing service, you have to ensure that you take adequate • Purpose of Call (e.g. type of case) steps to restore service within the same clearing cycle. You must immediately notify Barclays of • Presentation date any incidents if you consider you:

• Detail of the item including: • May breach the allocated SLCs

– Sort code • Have breached the allocated SLCs

– Account Number • May impact the ability of other participants to meet SLCs. – Serial Number

– ISN

18 7.2 Service Incidents with Barclays Image Clearing Service 8 Appendices You will be notified of any incidents within Barclays that impact Agency Clearing Services. 8.1 Agency Pay Screens 8.1.1 Summary screen Incidents will be managed on a case by case basis but the key scenarios are listed below.

1 7.3 Contact Points Data Files - In case of any issues with the delivery of data files please contact our File Gateway specialist support team on 0330 156 0011. iPortal/Agency Pay - For any issues with the Agency Pay application please use your current service lines with Barclays to report the incident.

Reporting fraudulent items to KAPPA - [email protected]

Research & Adjustments – (Tel Number) 01604 665 220

Research & Adjustments – (Fax Number) 01604 665 425 or 01604 665 477 2

5 6

19 8.1.1.1 Today’s RTP Items (1) 8.1.1.5 Reset All (5)

This is a summary table that shows the number and value of cheques that need payment Clicking ‘Reset All’ will reset the Pay/No Pay decision and the four process check status flags decisions made on them for the current processing day. The table updates as payment back to ‘Pending’ for all items the user has access to that have not already been submitted decisions are made and items submitted over the course of the processing day. 8.1.1.6 Submit (6) A user can see all the cheques that relate to sort codes they have access to. This can be Clicking the ‘Submit’ button triggers the following actions: all the sort codes linked to the legal entity set up in iPortal, or a subset as specified by the organisation’s administrator. • Submits payment decisions to the ICS for onward transmission to the Beneficiary Participant 8.1.1.2 Make Payment Decision (2) • Locks the submitted item as any decision sent to the switch is irrevocable This section includes the ‘Search’ button that allows the user to search for items they have access to. • Debits the Agency Bank NOSTRO/Settlement account for all the items where the Pay/No Pay decision is set to ‘Pay’

8.1.1.3 Bulk Pay Decisions – Process checks (3) • One debit is posted per sort code per submission

There are four main processes that determine if a cheque will be paid or not: • Sort codes will be linked to a NOSTRO/Settlement account

• Has the cheque been stopped? • Where there are multiple sort codes, each sort code can be linked to the same or different NOSTRO/Settlement accounts • Is it fraudulent or a duplicate item? • The debit is applied to the NOSTRO/Settlement account linked to the sort code • Does the drawer have sufficient funds? • A funds check is undertaken to ensure that the NOSTRO/Settlement account(s) have • Is the cheque completed correctly? sufficient funds to cover the value of all the items set to Pay. If that is not the case, you will receive a subsequent notification and all items included in that submission will be unlocked Clicking any of the ‘Set to Pass’ buttons will change the check status to ‘Pass’ for all items that within Agency Pay allowing the decisions to be amended and the items to be resubmitted. are ‘Pending’ and have not yet been submitted.

In order that the user is not kept on a screen waiting the action to lock the items within 8.1.1.4 Bulk Pay Decisions – Pay (4) Agency Pay is completed immediately. If there are any issues with the submission, you will be Clicking ‘Set to Pay’ will set the Pay/No Pay decision to Pay for all items that: contacted.

• The user has access to 8.1.2 Payment decision screen

• Have not been submitted 8.1.2.1 Search/Filter Panel • The Pay/No Pay status is set to ‘Pending’, and

• Have all four process checks set to ‘Pass’.

20 iv. >=

v. <=

1 vi. Between. 7 b. If a check is selected in the drop down, the first text box must always include a 6-digit 6 8 2 serial number. 9

3 10 c. If ‘Between’ is selected a second 6-digit serial number, greater than the first text box, must be entered.

4 5. Amount – the ability to search on the value of the cheque. 11 a. The drop down allows different checks to be selected:

5 i. =

ii. >

12 13 14 iii. <

15 iv. >=

v. <= The Filter Criteria allows you to view a specific item or a number of items that match the specified criteria. Each criterion specified reduces the number of items that will be returned. vi. Between. You do not need to enter any filter criteria, but this will return all the current days’ items. b. If a check is selected in the drop down, the first text box must always include a numeric value.

c. If ‘Between’ is selected a second numeric value, greater than the first value must be entered. 1. Hide Filter – hides the filter panel on the page.

6. Suspect Fraud – this field allows you to filter on whether the item has been flagged as a 2. Select Sort Code – this is a drop down that lists all sort codes that the user has access to. suspect fraud or not. Selecting this filter will automatically default the criteria to search for If a sort code is not selected, all accessible sort codes will be used in the filter. items where the flag has been set to ‘Yes’. This can be manually changed to look for items 3. Select Account Number – a free format text field where you can enter a single account number. where the flag is set to ‘No’.

4. Select Serial Number – the ability to search on cheque serial number(s). 7. Suspect Duplicate – this field allows you to filter on whether the item has been flagged as a suspect duplicate or not. Selecting this filter will automatically default the criteria to search a. The drop down allows different checks to be selected: for items where the flag has been set to ‘Yes’. This can be manually changed to look for i. = items where the flag is set to ‘No’.

ii. >

iii. < 21 8. CASS (Current Account Switching Scheme) – this field allows you to filter on whether the 8.1.3 Payment decisions item has been flagged as account switched or not. Selecting this filter will automatically default the search to ‘Yes’ but this can be manually changed to search for ‘No’.

9. Stop Check/Suspect Fraud/Duplicate Check/Funds Check/Participant Duty Check – 1 these fields allow you to filter based on the current status of any of the process checks. The

first drop down allows you to select if the search is ‘Equal To’ or ‘Not Equal To’. The second 2 drop down allows you to select any of the allowable values for these fields: 5 6 3 4 a. Pending 7 9 10 11 12 b. Pass 8 c. Fail 13 d. Hold.

14 15 16 20 10. Payment Decision – allows you to search for items with a specific Pay/No Pay flag:

a. Pay

b. No Pay 17 c. Pending. 18 19 11. Submission Status – allows you to set criteria on whether the item has been submitted or

not. The values can be: 1. Filter Criteria – how the Filter Criteria panel looks when hidden. Clicking ‘Show Filter’ will a. Not Submitted. display the filter panel as shown in the previous section.

b. Submitted 2. Sort – allows the items returned based on the filter criteria to be sorted based on one of the c. Defaulted – the Pay/No Pay value set by Barclays where an item has had to have a default following fields: decision applied as a decision was not submitted prior to the cut off. a. Account Number

12. Reset Filter – resets all filter criteria to their initial position. b. Serial Number

c. Amount. 13. Export – will return a comma separated variable text file based on the specified filter criteria. For details see 4.2.8. 3. Apply – will save any changes made on the Payment Decision screen.

14. Search – applies the filter criteria and returns results to the screen that match the criteria. 4. Apply & Exit – will save any changes made on the Payment Decision screen and return to the Summary screen. 15. Back – returns to the Summary screen. 22 5. ‘Edited’ – this shows how many items match the filter criteria specified and how many of a. Pass – not fraudulent or duplicate those have been updated. b. Fail – fraudulent or duplicate

6. Page navigation – if sufficient items match the filter criteria that span multiple pages c. Hold – can’t make a decision at the current time. (a maximum of 25 items can be displayed per page) then the user can move to the next, previous or a specific page. 15. Participant Duties Check – a drop down that allows the user to record whether this item has passed or failed participant duty checks which determine if the cheque has been completed 7. ISN – a unique reference for each debit and credit. This field is also a link that, when clicked, correctly. The drop down will default to ‘Pending’ but can be changed to:

will take you to the View Details screen. a. Pass – passed the participant duty check

8. Sort code, account number and serial number are code line details of the cheque. If an item b. Fail – failed the participant duty check has been account switched, the values will be for the new account. c. Hold – can’t make a decision at the current time.

9. Amount – the value of the cheque 16. Funds Check – a drop down that allows the user to record whether the drawer has sufficient funds in their account to cover the value of the cheque. The drop down will default to 10. Suspect Fraud – shows whether the Kappa process considers the item to be suspected of ‘Pending’ but can be changed to: being fraudulent. a. Pass – there are sufficient funds

11. Suspect Duplicate – shows whether the duplicate detection process considers the item to b. Fail – there are insufficient funds be suspected of already having been presented through the clearing. If the value is set to c. Hold – can’t make a decision at the current time. ‘Yes’ this is also a link that when clicked will navigate to the Compare Duplicates screen.

17. Pay/No Pay – a drop down that allows the payment decision to be record. By default, this is 12. CASS – shows whether the cheque is drawn on account that has been switched through set to Pending but can be changed to either ‘Pay’ or ‘No Pay’. the Current Account Switching Scheme.

18. No Pay Reason – a drop down that allows a no pay reason to be recorded for every cheque 13. Stop Check – a drop down that allows the user to record whether this item has been that is not paid. The No Pay reason list displayed is an industry list that directly translates stopped or not. The drop down will default to ‘Pending’ but can be changed to: into codes that need to be included in any no pay payment decision responses to the ICS. a. Pass – no stop applied If an item is set to No Pay, then this becomes a mandatory field. b. Fail – stop applied 19. Fraud Reason – a drop down that allows a fraud reason to be recorded for every cheque c. Hold – can’t make a decision at the current time. that is not paid due to fraud. The list provided is an industry list of fraud reasons and become mandatory for any item that is set to no pay and has a no pay reason of fraud. 14. Fraud/Duplicate Check – a drop down that allows the user to record whether this item is considered to be either fraudulent or a duplicate. The drop down will default to ‘Pending’ 20. If an item is updated, then the top right hand corner of the card changes from grey to but can be changed to: amber to give a clear visual indication the item has been updated but not yet saved. When

the changes are applied the amber changes to green. 23 8.1.4 View details screen 1. Debit/Credit – allows to switch between viewing details of the debit and related credit.

8.1.4.1 Debit details 2. An image of the cheque.

3. Front View/Rear View – allows toggling between viewing the image of the front of the 1 cheque and the rear of the cheque.

2 4. Rotate Left/Rotate Right – allows the cheque image to be rotated 90o left or right.

5. Zoom in/ Zoom out – allows zooming in and out of the cheque image.

6. Print – displays a page that contains only the front and back images of the cheque that can be printed using the capabilities of the users’ browser. If the user can save to PDF, then the images can be saved.

7. Basic cheque information, including whether the item has been flagged as suspect fraud or duplicate

3 4 6 8. Current details of the payment decision for this item, including the status of the four process 5 checks.

7 9. If an item has been drawn on an account that has been switched under the Current Account Switching Scheme the old bank’s sort code and account number will be displayed. 8 10. Back – navigates back to the Payment Decision screen.

24 8.1.5 Compare duplicates screen 1. Account Details – shows the sort code and account number of the current cheque requiring a payment decision and the old cheque being displayed.

3. Previous cheque image – an image of the previous cheque.

4. Front View/Rear View – allows toggling between viewing the image of the front of the cheque and the rear of the cheque.

5. Rotate Left/Rotate Right – allows the cheque image to be rotated 90o left or right.

6. Zoom in/Zoom out – allows zooming in and out of the cheque image.

7. Current Cheque Details – shows basic details of the current cheque.

8. Front View/Rear View – allows toggling between viewing the image of the front of the cheque and the rear of the cheque.

9. Rotate Left/Rotate Right – allows the cheque image to be rotated 90o left or right.

10. Zoom in/Zoom out – allows zooming in and out of the cheque image.

11. Back – navigates back to the Payment Decision screen.

8.2 Standard unpaid answers

Not Paid Description Valid Represent Reason Code for ICS Allowed 1 Refer to Drawer Yes No 2 Refer to Drawer - Please Represent* Yes Yes 4 Not signed in Accordance with Mandate Yes No 5 No Mandate Yes Yes 11 6 Payment Stopped Yes No

7 Payment Stopped - Theft Reported Yes No 25 Not Paid Description Valid Represent Fraud reason codes: Reason Code for ICS Allowed Fraud Reason Description Payment Stopped - Awaiting Confirmation – 8 Yes Yes Please Represent Counterfeit Non-valid cheque 9 Payment Prohibited by Legal Order Yes No Forgery Genuine cheque, not written by authorised Payment Prevented - Insolvency Act account representative 10 Yes No Proceedings Altered Debit Genuine cheque altered post issue 12 Drawer Deceased Yes No Conversion Genuine cheque paid into account opened Suspected Fraudulent/Counterfeit Cheque 13 Yes No until false pretence discovered within the clearing cycle Conversion - Account Take over Genuine cheque paid into account which 14 Account Closed Yes No has been taken over by a fraudster 16 No Account Yes No Altered Credit - Codeline or Payee Name Genuine cheque - credit altered (either codeline or name) 17 Non clearing Item Yes No Debit and credit payee name mismatch Required for MI validation during 18 Post Dated Yes Yes assessment period 19 Out of Date Yes No Duplicate Debit Cross Scheme Duplicate 20 Words and Figures Differ Yes No 21 Alteration Requires Drawer’s Signature Yes No 8.3 Industry Service Level Controls (SLCs) 22 Payee’s Discharge Required/Irregular Yes No The Service Level Controls that you need to abide by are detailed in section 4.8. For information 23 Cheque Incomplete Yes No only, the volume SLCs set by the industry are: 34 Advice of Drawing Required - Please Represent Yes Yes SLC cut off time Payment decisions to be at the ICS Payment Prevented: Drawer’s Bank in 39 Yes No insolvency or administration procedure. 10:00 70% Yes – NEW 42 Poor Image Quality No 12:00 85% CODE 14:30 95% Yes – NEW 43 Stop – Duplicate Cheque No CODE 15:00 99% Yes – NEW 15:30 100% 44 Default No Pay Yes CODE Yes – NEW The 15:30 cut-off is a hard cut-off and if any payment decisions are outstanding at this time, 45 Payee, courtesy or legal amount not legible No CODE the ICS will apply a ‘Pay’ decision to the item. Yes – NEW 46 Wrongly Delivered No CODE 47 Agency Bank Payment Prevented Yes Yes

26 8.4 Reference Documents Credit in-clearing file A data file delivered to the beneficiary bank which details the individual credit in-clearing items that can be uploaded into Copies of the following documents are available from your Relationship Team: the agency bank’s systems (MSG06). • Barclays File Gateway - ConnectDirect Connectivity Guide v3.0.pdf

Day of deposit (Day 1) Day the cheque is deposited into the ICS. • Barclays File Gateway - FTPS Connectivity Guide v3.0.pdf

Day of presentation (Day 2) Day a debit item is presented to you via Agency Pay for • Barclays File Gateway - SFTP Connectivity Guide v3.0.pdf a Pay/No Pay decision.

• Barclays SWIFTNet FileAct Connectivity Guide v1 5.pdf Debit in-clearing The processing of cheques to be paid/not paid by your institution as the paying bank. • DirectData Customer Manual.pdf

Debit in-clearing file A data file delivered to the paying bank which details the • Image clearing data file specifications – Detailed individual debit in-clearing items that can be uploaded into

• Image clearing data file specifications – Summary the agency bank’s systems (MSG05).

9 Glossary Debit out-clearing The processing of cheques into the clearing system by your institution as the collecting bank. Agency Pay The web-based interface offered by Barclays to manage

interaction with the ICS. Default pay/no pay decision A decision applied to all cheques where a pay/no pay decision has not been made by a given time. Available funds The point at which the beneficiary may utilise the proceeds of

the cheque. Eligible items Items that can be processed via the ICS. This includes cheques, banker’s drafts, building society cheques, postal Beneficiary bank The ICS participant that holds the payee’s account. orders, travellers cheques, dividend warrants, government warrants and payable orders. CASS Current Account Switching Service

ICS Industry Format XML data file format built following ICS industry standards Cheque and Credit The industry body that manages cheque clearing in Clearing Company (C&CCC) England, Wales and Scotland. Image Clearing System (ICS) The C&CCC administered image cheque clearing system.

Collecting bank The ICS participant where the cheque is deposited. Industry settlement The daily transfer of funds between settlement participants at the Bank of England. Credit in-clearing The processing of credits where the beneficiary bank is your institution. iPortal Barclays internet portal delivering services to our Corporate customers. 27 ISN Item Sequence Number.

Kappa A cheque fraud detection system.

Lockbox A service provider that receives and prepares cheque transaction sets for entry into the clearings.

Participant duties Obligations that all participants undertake to ensure that (formerly bankers duties) cheques that are processed in the clearing are in order.

Paying bank The ICS participant on which the cheque is drawn (MSG13).

Payment Decision A Pay or No Pay response to be returned for every debit item on day of presentation.

Payment response file A data file delivered to the beneficiary bank which details the pay/no pay decisions made by the paying bank.

R&A Research and Adjustment (for resolution of clearing differences).

Settlement Account (NOSTRO) An account held with Barclays for the settlement of ICS credits and debits.

Settlement bank A bank that holds an account at the Bank of England which is used for industry settlement.

Standard Barclays Format A flat file data format.

Third party provider A non-bank participant of the ICS.

XML Extensible Markup Language – mechanism to deliver structured data in a text file.

28 You can get this in Braille, large print or audio by calling 0800 400 100* (via Text Relay or Next Generation Text Relay if appropriate). Barclays also welcomes calls via SignVideo for BSL users. Visit barclays.co.uk/signvideo

*Calls to 0800 numbers are free from UK land lines and personal mobiles, otherwise call charges may apply. Please check with your service provider. To maintain a quality service we may monitor or record phone calls. Lines are open 7 days a week, 7am to 11pm. Barclays is a trading name of Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702). Registered in England. Registered number is 1026167 with registered office at 1 Churchill Place, London E14 5HP. Item Ref: 9915396. November 2017.