Harmonisation of Financement des entreprises: … · 3 Harmonisation of payment transactions in Switzerland Information included in this document may subsequently change as speciﬁcations

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Harmonisation of payment transactions

3

Harmonisation of payment transactions in Switzerland

Information included in this document may subsequently change as specifications for the processes are still being established by the financial community. Graphics have been simplified to make iteasier to understand the flow of payments.

Banque Cantonale de Genève

In the aftermath of changes to European standards and regulations, along with adoption worldwide of international standardISO 20022, the Swiss financial centre decided to adapt and harmonise its own payment processing system. The purpose is two-fold:

• bringing the Swiss system into line with European standards and optimising processing of payments by applying the same standard (ISO 20022) from start to finish of the process, a common language (XML) and the same account-numbering format (IBAN);

• simplifying today’s complex nationwide system (plethora of standards, processes, channels, forms and payment slips).

By 2018, everyone involved in this market (banks, including PostFinance, software vendors, businesses and individuals) will have to adapt their payment systems (credit transfers, direct debits and payments via BV/BVR payment slips) and use the samestandards, languages, formats and procedures.

The main changes will affect the format of messages, statements and payment slips; actual processes involved will barely be affected, and current functionalities will remain in place.

"Simpler, faster, more efficient and more secure payment transfers."

Harmonisation of payment transfers will affect all Swiss firms (no matter what their business is or how big they are), public authorities/agencies and, to a lesser extent, individuals. Having a clear understanding of the ISO 20022 standard, which will form the bedrock in the long run for payment transfers, and the syntax being used is a vital prerequisite for the migration to be successful. This is why we have decided to bring together in this document everything you need in order to understand what is involved in ISO 20022, its objectives and the advantages it will have for businesses. This document is intended to be both informative and practical, providing recommendations to pave the way for a smooth migration.

BCGE is actively preparing for this harmonisation by working closely with reliable partners and striving to make the whole migration process easier for its customers. Our experts are available to support you in negotiating this switchover to the newISO 20022 formats and to share their expertise and know-how in this area with you.

What are the key benefits of harmonisation for Swiss businesses?

• Shared procedures, standards and formats, in conformity with both national and European market practices• Improved data quality and processing thanks to use of the common IBAN format for all payment transactions• Increased automation of payment processes• Easier searches thanks to identical reference numbers being used throughout the payment process (end-to-end ID)• Increased automation of your payment processes thanks to a common standard enabling automatic recognition

of payments• Simpler cash management• Lower search and software maintenance costs• More information exchangeable between payer and payee• Greater transparency thanks to standardised reports and status messages

"An opportunity for businesses to optimise their payment processes and cash management."

What’s changing A snapshot

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Close-up look at IBAN

The International Bank Account Number (IBAN) is an account number complying with international standards. It follows the same pattern in all European countries although it may vary in length, up to a maximum of 34 characters. The IBAN makes it possible to pinpoint quickly and clearly the three key features of a banking relationship: the country, the financial institution and the account number.

The Swiss IBAN (21 characters) appears on all bank statements and on the Maestro card.

Phased harmonisation:

Norme ISO20022 (pain / camt)

2017 2018 2019 2020 2021

What steps should you take?

• Start getting used to using the IBAN straightaway• Systematically use your IBAN for all of your payments• Update documents and other forms that include your account number

(payment templates, standing orders, invoices/bills, forms, standard letters, etc.)

• Take stock of what tools and systems you are using: How do you receive payments made to you? How do you make payments? How do you reconcile your payments?

• If you use standard software for your book-keeping, invoicing or payments, we would recommend you contact your software vendor as soon as possible to check that their solution will be compliant

• If you use your own in-house software solution, we recommend you plan with your IT department for conversion to the new formats

(You can find our recommendations in detail on page 10)

Old and new formats (DTA)

CREDIT TRANSFERThe ISO 20022 international standard is becomingthe standard for electronic payment orders.Ultimately, IBAN will be the single account-identification number, taking the place of currentaccount numbers.

Norme ISO20022 (pain / camt)

Old formats

DIRECT-DEBIT PAYMENTThe current system for direct-debit paymentswill be replaced by a new solution, broadlyinspired by e-billing.

QR invoice

Old payment slip

PAYMENT SLIPS The current red and orange payment slips will bereplaced by the QR invoice.

What’s changing The details

New payment process for credit transfers

The ISO 20022 international standard is becoming the standard for electronic payment orders (EPO), and existing formats will change. The purpose is to harmonise the electronic exchange of data worldwide so that payment processes can be increasingly automated.

What is going to change?

• The current DTA, EPO, BVR and ECA-F formats will all be replaced by a standard XML format (pain.001). You will eventually have to transfer your payments to your bank using the new ISO 20022 format.

• The IBAN will become the single account-identification number, taking the place of current account numbers.

What are the benefits?

• Increased automation of invoicing and monitoring processes

• Optimisation of payment handling, checking and reconciliation processes

• Clear identification of payments, from start to finish of the payment process (straight-through processing:STP), making it easier to process any returned payments

Old and new formats will exist side-by-side during the scheduled transition phase from mid-2016 to mid-2018.

Close-up look at EBICS

Introduction of ISO 20022 should lead to widespread useof the EBICS communications module. This module has been especially devised to handle large volumes and the new ISO 20022 message formats.

Businesses that submit sizeable volumes of payment orders to their banks via a communications module are strongly advised to equip themselves with an EBICS module to achieve greater efficiency, speed and stability in their connections. This module will also simplify multi-bank relationships and activation of the BCGE Business Link agreement.

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Customer(accounting software)

The business issues a payments file (DTA format)

BCGE

Current credit transfer system With ISO 20022

The business receives an acknowledgement of receipt

and acceptance file (DTA protocol)(for BCGE Business Link* only)

Customer(accounting software)

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IBA

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rmats

The business issues a payments file (pain.001 format)

BCGE

Intraday electronic account statement (MT942) End-of-day electronic account statement (MT940)

*For BCGE Netbanking, the payment status notice is delivered online

Intraday electronic account statement (camt.052)End-of-day electronic account statement (camt.053)Electronic debit notification (camt.054)Notifications are not always sent out systematically, but will be dependent on what the customer wants. Conversion of MT940/42 formats is optional (see p.6)


and payments status file (pain.002)(for BCGE Business Link* only)

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Customer/invoice issuer(accounting software)

Customer of the business

The business sends aninvoice to its customer

BCGE

Current paying-in system (payment slip) With ISO 20022

The customer pays the invoice to the issuer, at BCGE, via the

customer’s bank or the post office

The business downloads the BVR file via BCGE Netbanking or BCGE Business Link

Need

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Intraday electronic account statement (MT942)End-of-day electronic account statement (MT940)

Customer/invoice issuer (accounting software)

Customer of the business

The business sends aninvoice to its customer

BCGE

The customer pays the invoice to the issuer, at BCGE, via the

customer’s bank or the post office

The business downloads the camt.054 file via BCGE Netbankingor BCGE Business Link


Intraday electronic account statement (camt.052)End-of-day electronic account statement (camt.053)Notifications are not always sent out systematically, but will be dependent on what the customer wants.Conversion of the MT940/42 formats is optional (see p.6).

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A new format: the QR invoice (formerly the payment slip)

The QR invoice will replace the current payment slips in Switzerland from January 2019.

What’s going to change?

• The new QR invoice contains a QR code that replaces the coding line and contains all the relevant payment information,enabling payments to be reconciled automatically

• The QR invoice is valid for all types of payment and allows for billing in CHF and EUR• Billers can print QR invoices themselves on any standard printer• The postal account or BVR subscriber number will be replaced by an account number in IBAN (QR-IBAN) format;

in the case of BVRs, the QR-IID number specific to financial institutions will be incorporated• The debtor can use e-banking on their smartphone to pay their invoices quickly and easy in just a few clicks

Note: All the information required to make a payment will be clearly displayed on the QR invoice, meaning that you can still pay your invoices at the post office counter, using a payment order or via e-banking.

"Scanning payment data will be more secure and more efficient"


• Reduced risk of errors and simplified data processing thanks to the QR code • In addition to relevant payment data, the QR code also contains other useful information for processing payments• Simplified payment reconciliation process• The QR code can be integrated into commercial applications and used in new digital means of payment.

New format

The current red and orange payment slips (BV/BVR) will be replaced in 2020 by the new QR invoice

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What will the new QR invoice look like?

Picture 1: QR invoice The new QR invoice contains a QR code that replaces the coding line and contains all the relevant payment information. Billers can print QR invoices themselves on any standard printer.

Picture 2: QR invoice with Swiss cross

Picture 3: the current orange payment slip (BVR)

Picture 4: the current red payment slip (BVR)

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Current direct-debit authorisations or those set up before end-Q4 2018 will remain valid (no expiry date scheduled).

A new system for direct-debit payments

The current system for direct collection of payments (LSV+/BDD direct debits) will be replaced by a new solution, broadly inspired by e-billing. The purpose is to simplify, unify and optimise direct-debiting procedures.

What is going to change?

• Direct-debit payments and the e-billing process will continue to exist side by side but will be grouped together into a single infrastructure (a central web portal) so businesses can process direct debits and e-bills using this one portal

• E-billing functionalities will be optimised and new options added• The current two variants – one with right of objection (similar to the existing LSV+) and one without

(similar to the existing BDD) – will continue to exist

"The whole invoicing process will be made easier."


• Issuing invoices: the debtor will no longer need to send a form to the creditor to register for direct debiting; the debtor will henceforward be able to ask for bills to be issued directly via the central web portal (Paynet).

• Paynet will include an automatic monitoring system to check a valid debit authorisation is in place, with confirmation being sent to the creditor.

Customer/invoice issuer(accounting software)

Debtor’s bank

The business sends an LSV+/BBD file

PayCom Web (SIX) PayCom Web (SIX)ou BCGE

Current direct-debit payments system With ISO 20022

The bank of the debtor debits their account to credit the issuer’s account at BCGE

Need

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Customer/invoice issuer (accounting software)

The business sends a pain.008 file


and payments status file (pain.002)

BCGE

The business downloads the BVR file via BCGE Netbanking or BCGE Business Link

Intraday electronic account statement (MT942) End-of-day electronic account statement (MT940)

BCGE

BCGE

Banque dudébiteur

Payment of the LSV

Direct-debit request

The business downloads the camt.054 file via BCGE Netbanking or BCGE Business Link

Intraday electronic account statement (camt.052)End-of-day electronic account statement (camt.053)Notifications are not always sent out systematically, but will be dependent on what the customer wants. Conversion of MT940/42 formats is optional (see p.6).

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Close-up look at the new reporting formats (2018)

Running in parallel with the changes being made to the payment system, a new format for electronic statements and reports (ISO 20022 XML) is being put in place. This will allow those involved to communicate and exchange more informationin a common and structured language both nationally and Europe-wide.

Current SWIFT formats are not directly affected by these changes which, for now, are only being applied to the proprietary SIC and PostFinance formats: the MT900/10, MT940/50 and MT942 formats are thus being retained.

E-documents and hard-copy statements will also continue as before.

Switching over to the new formats is not compulsory and can be done gradually.

Advantages of the XML format:

• The camt statements will allow customers to generate, at any time, a readable PDF statement or notification; in absolute terms, there will no longer be any need to keep archived e-documents. These will continue to be made available by the bank (unless the business explicitly opts out of this). As such, customers can make savings on their file-keeping and print out, whenever they want, any material evidence of any transaction in the form of a standardised document that can be sent to a supplier who might request proof of payment.

• In order to ensure some transactions, such as salary payments, remain confidential, customers can receive non-itemised camt files:- camt.054: aggregate non-itemised notification- camt.052/053: a statement with non-itemised lines, for some of all of the transactions

• Reconciliation of BVR credits will be made that much simpler with these new formats (name of creditor notified).

INTRADAY transaction statement listing all of the day’s credit and debit movements on the accountwhich have not yet been posted.

END-OF-DAY account statement comprising all the day’s positions posted to the account, the current account balance and future balances, taking due account of transactions still pending posting at the end of the day.

Electronic debit and credit notifications for transactions posted.

camt.052

camt.053

camt.054

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To prepare for and properly assess the adjustments that will need to be made, we would encourage you to take the followingsteps in advance, selecting the measures of relevance to you among those presented below:

Concerning IBAN

Concerning new payment processes (credit transfers/direct debits)Crucial factor: the type of software you use for your accounting/book-keeping, invoicing or payments.

Use your IBAN for all your nationwide payments and save your IBAN in your accounting softwareStart inputting account numbers in IBAN format into all your customer databases todayUpdate documents and other forms which include your account number (payment templates, standing orders,invoices/bills, forms, standard letters, etc.)

If you are using a standard software package:

• Contact your software vendor to make sure that the solution you use will be compliant and find out the planned timetable for upgrading your payments software

• Check with your bank:- when the bank intends to adopt the new formats- what you must to do to cope with this change- whether you can conduct any trial runs with the bank- whether your payment system or cash management can be optimised

• Plan and budget for upgrading your software• Make sure you adjust your banking details, account number, database, etc.• Test out your new message formats via the http://validation.iso-payments.ch website• As the new XML formats use more data than current formats, you should think about raising this issue with

your software vendor

Concerning the new payment slips

If you issue payment slips for payments to be made to you, check with your supplier to make sure your software will be upgraded to generate and print the data codes (QR code)If you receive and process payment slips, make provision in the long run to adapt your reading devices and scanners so they are can scan and interpret the data codeDo a stock-take of your existing forms and reorder a limited supply of current payment slips.

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What steps do you need to take?

If you are using your own in-house software package:

• Work with your IT department to plan the switch to the new ISO 20022 formats and look into arrangements for archiving messagesPlan to make any required changes and undertake necessary testing well in advance

• Test out your new message formats via the http://validation.iso-payments.ch website


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Table summarising the changes


Type of transaction

Credit transfer Payment order

Order status

Direct debitDirect-debit request

Order status

Payment slipIssue

Electronic reportingEND-OF-DAY account statements

INTRADAY report

Debit/credit notification

Direct debit/creditnotification

BV/BVR credit notification

Current format

DTA file

DTA protocol

LSV+/BDD

Red and orange BVR

MT940/50

MT942

MT900/10

LSV file

BV/BVR file

New ISO 20022(XML) format

pain.001

pain.002

pain.008

pain.002

camt.053 itemised and non-itemised

camt.052

camt.054

camt.053 itemised orcamt.054

camt.053 itemised orcamt.054

Key features

IBAN compulsoryand unique paymentreference number(End-to-End ID)

The pain.002 indicatesthe status of the order.

IBAN compulsoryand unique paymentreference number(End-to-End ID)

The pain.002 indicatesthe status of the order.

QR invoice

Optional

Optional

Optional

Stronglyrecommended

Stronglyrecommended

Recommendations

Update your databases and payment templates by incorporating the new IBAN account number

Update your software package or contact your software vendor as soon as possible to plan to upgrade your application.

You can continue using your usual forms for the time being; instructions registered up to Q4 2018 will remain valid.

Contact your software vendor as soon as possible to update your formats.

You can opt to retain the current MT-style formats or adopt the new formats, depending on how your data are processed.

With the change in formats, reporting statements may contain more data and information, making the process of reconciling positions that much easier.

If you do decide to make the switch,contact your software vendor to check whether the new formats can be handled and plan to upgrade your systems.

Contact your software vendor as soon as possible to plan to upgrade your applications.

Deadline

mid-2018

1 January 2021

1 January 2019

____

____

____

2018

2020

Migrating to ISO 20022 will deliver tangible benefits for your business, enabling you to lay the foundations for a simpler and more efficient payment system.

"This migration will provide the opportunity for your business to optimize its payment processes."

Experts at our Business e-solutions center will help you in analysing your current position, suggest running a diagnosis of your payment processes and support you through the switchover. They will also be able to guide you towards the righttools and solutions for your business.

Your personal adviser, supported by our Business e-solutions center, is available to help you throughout this harmonisation process and to answer any questions you might have..

For more information:

Banque Cantonale de GenèveTelephone: +41 (0)58 211 21 00 (Monday to Friday from 7.30 a.m. to 7.30 p.m., and Saturday from 9.00 a.m. to 4 p.m.)E-mail : [email protected]

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Business e-solutions center


SEPA (Single Euro Payments Area)The Single Euro Payments Area (SEPA) covers 34 countries, including Switzerland, in which terms and conditions relating to euro payments are harmonised. Inside this area, payments are simple, fast, economical and processed like national payments.

ISO 20022 international standardInternational standard governing the electronic exchange of data in the financial sector (payment/securities/cash/trading transactions, etc.). The standard uses structured XML messages in accordance with a standard laid down by the InternationalOrganization for Standardization (ISO), which forms the foundation for harmonising payments.

XML (eXtensible Markup Language)Format for exchanging computerised data that allows files to be created in a variable format.

DTAStandardised format for exchanging data, in which different types of transactions undertaken by customers (BVR, payments in Swiss francs or in foreign currencies, etc.) can be submitted electronically to Swiss banks. Electronic payments order in PostFinance’s proprietary format or ISO 20022 format.

Pain (Payments Initiation)XML messages exchanged between clients and financial institutions to initiate/confirm orders, for instance:

• pain.001 for credit transfer orders• pain.002 for status notices• pain.008 for direct-debit instructions

Pacs (Payments Clearing and Settlement)XML messages exchanged exclusively between financial institutions.

Camt (Cash Management)XML messages exchanged between financial institutions and their clients, for instance:

• camt.052: daily account statement• camt.053: account statement as of the previous day• camt.054: debit/credit notice or itemised notification

Helpful links

www.iso20022.orgwww.iso-payments.chwww.paymentstandards.ch

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Lexicon


Your personal adviser, whether you are an individual client or a business customer, assisted by our team of payments experts, is available to help you throughout this harmonisation process.

For more information:


Telephone: +41 (0)58 211 21 00, on Monday to Friday from 7.30 a.m. to 7.30 p.m., and Saturday from 9.00 a.m. to 4 p.m.

Email : [email protected]

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Harmonisation of Financement des entreprises: … · 3 Harmonisation of payment transactions in Switzerland Information included in this document may subsequently change as speciﬁcations