End Parties in the Four Corner Model – Private Customers

Who and what actually are the end parties in the Four Corner Model presented in a previous article? You may think of yourself if you possess a bank account. And that is right. Individuals however are only one type of end parties because banks have many types of customers: The private customer, the small and medium-sized business (SMB), the associations and non-governmental organizations (NGO) and the large companies. In this article and the next, we will look at each type of end parties and consider their needs particularly in relation with (SEPA) credit transfers that they may initiate or receive.

The private customer is an individual who has opened an account with a bank. He receives his salary or pensions and makes a couple of credit transfer per month. In the European Union, the mean number of credit transfers made by individual per year amounts to around 50. It means that we, as individuals, make between 4 and 5 transfers each month. Thus compared to other actors, private customers are not heavy users of payment services. In general, they use the Website of their Bank to manually input an order or they can go to a branch and complete a form with transfer information. They might also use their phone and other channels accepted by their bank to initiate payment orders. The bank will then send a confirmation, update their account balance and provide a statement in paper or electronic form.

Picture of Individuals which are Bank private customers
Individuals – the bank private customers

As receivers of funds, private customers are keen to be informed quite rapidly, particularly through the mobile or the Internet banking applications that allow checking account balances anytime and wherever he would like to. How many payments does a private customer receive each month? I could not find any statistic, but we all know that number is much smaller than the mean number of credit transfers made. Customers therefore appreciate when they receive a notification form their bank that their accounts have been credited.

Technology enables the rapid access to information but has also been used to facilitate the initiation of fraudulent transactions. Fraudsters are constantly coming up with new ways to trick people out of their money. Despite the initiatives taken by banks to protect their customers, the cost of fraud continue to rise all over the world. Therefore the fear of falling victim to payment fraud remains a concern for private customers. Maintaining the trust in payments and payments systems is vital for any economy and the banks must keep fighting fraud threats to reassure their customers. Security belongs to the top priority topics on the agenda of banks today and for the years to come.

In general, the private customer opens one current account with a bank for his banking operations including transferring and receiving funds. He may have other types of accounts, like saving accounts too. But the number of accounts is pretty limited compared to other types of end parties as we will see later. This may sound like a detail, but it is not. Because of the reduced number of accounts, the customer does not require sophisticated reporting. And the bank can satisfy his needs with basic reporting services.

The table below contains a summary of the private customer’s needs.

Private customer as Debtor Private customer as Beneficiary
  • Initiates 4 to 5 credit transfers every month
  • Receives salary, pensions and other revenues on his account.
  • Has a very limited number of accounts (one current account is in general sufficient).
  • Wants to have access to payment and account reporting whenever and wherever he wishes, but reads account statements from time to time.
  • Is concerned with security

In the next article, we will consider Small and Medium Businesses (SMB).


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