The standardisation of formats in payment transactions is being driven forward in an additional area. International payments are also to be converted to the new ISO 20022 standard from 2025.

In the case of international payments, for example, we are talking about Swiss franc payments that are made abroad or foreign currency payments that are made, for example, in Europe but not in EUR. The financial institutions have generally already launched the corresponding projects.

What can we expect from this and to what extent are bank customers affected? The last major changes are still very much in the minds of everyone involved. The introduction of the QR-bill, the new entry screens in the e-banking applications and the format changes in the file-based interfaces between customers and banks have kept everyone busy.

Payment transactions have been undergoing constant change for years. However, when it comes to the pure processing of payment orders, the financial sector mainly generates income from the associated foreign exchange transactions. This raises the question of why the industry is investing so many resources in a problematic business area in terms of earnings.

Es geht um die Automatisierung in den Abläufen, respektive in der Verarbeitung der Aufträge. Können für die Abwicklung keine kostendeckenden Preise erhoben werden, müssen manuelle Tätigkeiten in der Prozesskette eliminiert werden. Eine automatisierte Verarbeitung verlangt nach strukturierten Daten, um eindeutige Interpretationen vornehmen zu können. Und genau im Bereich der Daten-strukturierung sind die aktuellen Meldungstypen, welche SWIFT* für den international standardisierten Datentransfer anbietet, weniger gut als der neue XML-basierte ISO 20022 Standard.

The financial industry has had good experiences with the ISO 2022 standard; first in Europe in the context of SEPA payments, then also in Switzerland during the changeover of Swiss payment transactions.

For bank customers, the experience with the financial centre's standardisation efforts has been rather ambivalent. The fact that customers have to get used to the changes is probably the least of the consequences. For SMEs, however, the changes often result in major IT projects that cost time and money.

On the other hand, the introduction of an innovation does not generally reduce the transaction prices for payment transactions for bank customers - as expected, not even for foreign payments following the introduction of standardisation. There is no legal basis in Switzerland for regulating payment transaction prices.

The structuring of the data in the payment order affects the customer to a not inconsiderable extent. If structured data - in particular address data of suppliers and partners - is available at all, this data must be entered correctly in the corresponding fields of a payment order. Mandatory fields make a significant contribution to ensuring that all mandatory information is enriched. The customer is therefore responsible for obtaining the data that their financial institution requires for automated processing. Furthermore, it is much easier for banks to validate structured data fields during the order submission process and, if necessary, report corresponding error messages in real time - for example in e-banking or at the latest when importing the payment file. The consequence is that the rejected order must be corrected by the customer and resubmitted.

Of course, the volume of international payments plays a modest role in the overall context of payment transactions. The effects of the upcoming standardisation are therefore more likely to affect large companies with international connections. All other bank customers can therefore look forward to this development (more) calmly.

For them, the launch of Swiss ‘instant payment’ processing is likely to be more interesting. A CHF payment should reach the recipient within a few seconds of being issued. There will be more about this in a forthcoming report.

Are you at a similar point with your company and struggling to meet the challenge? Bosshard & Partner will be happy to support you with in-depth expertise in payment transactions and project management.

*SWIFT = Society for Worldwide Interbank Financial Telecommunication