How to Communicate with CESOP and Comply with New EU Regulations

If your business provides payment services across European borders, you need to know how to communicate with the Central Electronic System of Payment information, or CESOP. This includes banks, electronic money institutions, and other regulated payment institutions.

Regulations passed in 2020 and scheduled to come into effect on January 1, 2024, require payment service providers to transmit information on cross-border payments to CESOP, the centralized European database. CESOP then provides anti-fraud experts with access to this data to combat VAT fraud.

Starting in 2024, every affected payment service provider will need to send detailed records of payees and payments every calendar quarter to CESOP. So how do you communicate with CESOP?

What You Need to Know

Communication with CESOP requires sending records to the EU member state involved in your cross-border transactions. Each member state provides technical specifications for communicating payment records, so the details involved in complying with CESOP regulations will vary slightly across different member states.

As an example, the Netherlands provides baseline compliance information and a signup form to acquire detailed specifications here.

Since the specifics of communicating with individual member states may vary, it is important to focus on the common principles upon which these specifics will be based. Understanding the general approach to communicating with CESOP allows for the efficient adoption of each set of particulars as they arise.

AS4 is the Key

Communicating with CESOP via EU member states becomes much easier once your organization supports AS4 communication. While there is no guarantee that the same AS4 setup will satisfy every detail of each member state’s requirements, implementing AS4 will take you close to the finish line – no matter which countries you work with.

What is AS4?

AS4 has long been the dominant communication standard for European business. AS4 is a protocol that governs data transmission between parties, and it has several key features:

• Messages are sent directly from sender to receiver over the web (HTTP messages)
• Messages are encrypted and signed to ensure security and the validity of the sender
• The payload of messages can be defined as XML schema documents (XSDs)
• Messages are automatically acknowledged so that non-repudiation is guaranteed

Given these benefits, AS4 has long enjoyed popularity among data infrastructure experts. While it may sound complicated, AS4 implementation is made much simpler by leveraging B2B integration tools that streamline AS4 communication.

How to Streamline AS4 Adoption

Adopting AS4 by building your own AS4 solution is likely to be a lengthy and expensive process. But there is no need to reinvent the wheel – modern B2B integration platforms have already done much of the work required to quickly begin sending AS4 messages.

Given the upcoming 2024 deadline, it is important to prioritize B2B integration solutions that emphasize ease-of-use and time-to-value. Since these are two of the guiding principles behind CData Arc’s development, Arc is an excellent choice for organizations looking to get ahead of the curve and implement AS4 well before time runs out.

How CData Arc Simplifies AS4

CData Arc provides Drummond-certified AS4, meaning that the technical rigor of Arc’s AS4 implementation has been battle-tested for over a decade.

But Arc doesn’t merely settle for providing AS4 capabilities – Arc seeks to make AS4 as painless as possible to ensure that implementation overhead is minimized. Arc’s AS4 connections are established by providing a few simple connection parameters – like an identifier, a URL, and a digital certificate. This is all information that your EU member state will provide as you begin the process of acquiring CESOP specifications.

In addition to simplifying the process of establishing a connection, Arc also simplifies the process of building an AS4 message payload. AS4 is built on top of XML, the primary format that Arc uses for data manipulation. As a result, the process of building an AS4 message containing the payment information that CESOP requires fits neatly within the architecture of Arc’s workflows.

Arc provides no-code, drag-and-drop mapping tools to easily build XML structures containing exactly the payment transaction data you need. Simply connecting these mapping tools to your AS4 connection in Arc’s visual flow designer completes the process of communicating with CESOP over AS4.

Getting Started with AS4 in CData Arc

While there is plenty more you could learn about Arc’s robust AS4 capabilities, the easiest way to get started complying with CESOP regulations may be to try out Arc for yourself. Get a free, fully-functional trial to see for yourself how Arc satisfies the technical specifications provided by the EU member states you work with.

For more personalized help, please feel free to reach out to [email protected] with specific questions related to your AS4 implementations.