Why the Peppol network is becoming essential to the French Continuous Transaction Control system

Continuous transaction controls are not new to the industry at large; this system has been tried and tested, and implemented in countries such as Italy, Saudi Arabia, and Latam. However, the French government wants to set up a unique hybrid CTC system that would be partly centralized with the Public Invoicing Portal (PPF) and partly decentralized with the Partner Dematerialization Platforms (PDPs).

The directory will be managed centrally on the PPF. There will be two types of service providers: those connected solely to the PPF for exchanges in accordance with the standards imposed by the French tax authorities, i.e., Dematerialization Operators (ODs), and those who can carry out direct exchanges without using the PPF, i.e., Partner Dematerialization Platforms.

The French Government have now chosen the tried-and-tested service enabler Peppol to carry out this ambitious project and is seen as the standardized framework of choice amongst large enterprises. It has been used in France since 2017 for Business-to-Government exchanges, via Chorus Pro and Pagero are the single Peppol service provider for all B2G e-invoicing in France.

Supporting B2G and Business-to-Business (B2B) trading, Peppol connects organizations through a network of Peppol-accredited Service Providers, removing barriers to electronic trading created by closed ‘three-corner’ networks.

Peppol is not a portal, or a provider of exchange services. Peppol is an enabler providing a set of document specifications that integrate global business processes and delivering the governance to make it work.

Peppol’s four-corner model adheres to global-scale interoperability by integrating business processes and standardizing the way information is structured and exchanged through decentralized continuous transaction controls.

Initially, the official text on how the French e-invoicing CTC model would work required the candidate PDP to be interoperable with the PPF and at least one other PDP. Interoperability between PDPs was, therefore, not systematic and still depended on the goodwill of other service providers to cooperate.

Due to this, the most influential and powerful players might retain their dominance over the market in closed networks while thwarting the spread of interoperability between PDPs. However, the DGFiP has specified that creating closed networks of uncooperative PDPs was not the reforms intended purpose. A PDP must, therefore, be connected to all other PDPs and be fully interoperable with one another.

This stance could ensure that the market opens closed networks with interoperability increasing, to the benefit of customers.

The mobile phone model is a good example. Regardless of your correspondent's technical operator, you can reach him simply by knowing his numerical identifier: the telephone number of his correspondent. The current telephone model was built on the obligation of interoperability and the use of common standards. If we want all the PDPs to interact with each other without even knowing each other and having signed agreements, we need a contractual framework and a standardized network.

This is what Peppol can provide.

At this stage, there are still questions concerning the replication of the directory, the identification of PDPs within the Peppol network, and the syntax of messages to be processed other than UBL, but the very principle of systematic interoperability requires recourse to the Peppol network. By using this international standard and not deviating from international norms, this backbone network would become a key factor in the success of the reform announced by the French government.

Service Providers like Pagero, with an open network philosophy and emphasis on interoperability, can help businesses facilitate seamless e-invoicing and compliance with mandates and technological infrastructures.

Book a demo to find out how Pagero can help prepare and automate your business for implementation of the french mandate and beyond