In early 2017, we received the first brochures and information from banks on the topic of “Harmonizing Payment Traffic”. To be honest, I didn’t really know what this term meant so I started off by reading the first brochures.
I quickly realized that the term “Harmonizing Payment Traffic” refers to a huge change that will affect the whole Swiss payment system. From 01.01.2018, payments will be switched to ISO 20022 in individual phases.
ISO 20022 (“ISO 20022 Financial Services – universal financial industry message scheme”) is an international standard in which the electronic data between the bank and customer shall be exchanged and transferred via XML (extensive markup language) in the future.
This transition will ensure that the Swiss finance center will remain competitive in the long term and ensure a higher degree of payment automation and efficiency. Currently, in Switzerland, payment traffic exists in various formats such as different paying-in slips or payment formats that, during the course of harmonization, will be consolidated, got rid of or replaced by new formats such as QR invoicing.
For customers, harmonization means lots of new methods and terms to get to grips with
For example, 2 new message types have been defined for communication between customers and banks and between banks and customers. These are plain messages (payment initiation) for transfer requests and standing orders and camt messages (cash management), which include various bank statements (MT940 / ESR).
Such a large project as payment traffic harmonization naturally cannot be completely implemented within a year but is being precisely planned in advance and taken into account in a roadmap.
The individual stages have been defined as follows
Firstly, EZAG and DTA files will no longer be processed. The deadline for the old payment files is 01.01.2018. From this date, PostFinance will no longer process EZAG files and will only accept XML files.
Other financial institutes shall follow by the middle of 2018 according to the plan. From this time, no old files (DTA) will be processed for payments. The productive use of QR invoicing will be possible from the beginning of 2019. A provisional end date for the current paying-in slips has been defined for the end of 2020.
From January 2019, QR invoicing will replace the current Swiss paying-in slips. A provisional end date for the current paying-in slips has been defined for the end of 2020.
QR invoicing entails a printed payment unit on the invoice in A6 format. This payment unit includes a machine-readable QR code as well as all payment-relevant information such as account, recipient, additional information, payment date etc.
Although harmonization is a communal project of the Swiss financial center, financial institutes themselves will be responsible for their own transition to ISO 20022.
This transition does not just affect banks, but also companies and private individuals. As the transition will take place in stages, the changes are subject to different timings, so people will have to keep an eye on all changeover deadlines.
Even though harmonization has been in planning for years, the actual implementation is new for many. After all, the halt to the processing of EZAG and DTA payment files means that customers will actively come into contact with harmonization measures.
We will have to wait and see how the acceptance of these new file formats develops.