On May 15, Utsit hosted a webinar for the Association Française des Trésoriers d'Entreprise (AFTE) on the theme of "ISO 200222 migration: multiple adjustments for a successful transition to 2025".

The number of participants and the number of questions asked confirmed that the topic of ISO 20022 migration still generates a great deal of interest and questioning on the part of corporate treasurers, given the lack of coherence in the speeches, offers and subjects grouped under this generic term. It was therefore well worth a quick overview to clarify the context, challenges and opportunities offered by this migration.

First and foremost, it's important to remember that the genesis of what is commonly referred to as "ISO 20022 migration" stems from the desire of the major economic powers, via the G20, to facilitate the circulation of capital, not only for companies, but above all for individuals and, in particular, migrant workers. This is why the G20 has set itself the objective of making international transfers faster, more accessible, transparent, secure and less costly.

Responsible for implementing these objectives, the Bank for International Settlements (BIS) and the Financial Stability Board (FSB) in particular, have agreed to promote the use of ISO 20022 as an exchange standard to harmonize and optimize the processing of these transactions.

With this in mind, the main settlement systems (EUR, GBP, CAD, CNY, CHF, USD in part ...) have already transformed or are about to transform (USD; to be continued and completed in July 2025) their systems to this single standard, in order to harmonize their language. For full coverage to be achieved, the conveyors of these orders must also use the same standard, which is why Swift is also in the process of upgrading its messaging system, and will have completed its transformation by November 2025 (a few exceptions and special treatments will still be possible, but will no longer be part of the "standard" framework).

By the end of 2025, Swift estimates that 80% of settlement systems will have adopted this standard.

While the question of format and standard is essential to harmonize the language used by all those involved in a payment transaction, the question of data quality is just as important. And since banks, as part of their obligations to combat money laundering and the financing of terrorism, are having to comply with an ever-increasing number of rules, they need to be able to use data that is sufficient and correctly structured to apply high-performance processing in order to avoid false positives, and thus speed up processing times and reduce costs. It is therefore only logical that the Payment Market Practice Group (PMPG), a working group under the aegis of Swift, has decided to impose the use of payment stakeholder addresses (issuer and beneficiaries, Ultimates and banks under certain conditions) in a more organized way.

This project has a major impact on payment issuers, who must ensure the quality of payee information in their various databases, and also between their systems, so that their payment orders meet the expectations and constraints of their banking partners. While the obligation to transmit beneficiary and bank address information is already in place, the need to transmit this information in a structured (or hybrid) way will be mandatory by November 2026 at the latest. In the event of a necessary update (of data or tools), the task is such that it is imperative to get down to work right away, or risk seeing a large proportion of your transfer orders rejected.

The need for issuers to better structure their payment data will also have consequences for the formats used to transmit their transfer orders to their banks, since many of the formats commonly used today do not (CFONB320), or very poorly (MT101), structure the data expected by banks to enable them to carry out their compliance checks.

The choice of exchange protocol used by a company to communicate with its banks is also important, since the FIN messaging system, incompatible with the ISO 20022 standard, is evolving towards FINplus in order to retain its main features and added value (notably message reachability and control), but adapted to XML messages. Corporate treasurers who use this messaging system, either directly or indirectly with their banks, will need to anticipate any potential impact. While there is no obligation on the part of Swift for companies to migrate from FIN to FINplus and replace MT messages, some banks have already scheduled and announced the end of these services for companies.

Also, more recent versions of exchange formats, such as pain.001 in its 2019 version (pain.001.001.09), offer new opportunities to better structure data or take advantage of new services. These include

- LEI: the use of this international identifier to identify a counterparty seems to be gaining ground as the ideal solution, rather than the use of a name whose form, language and abbreviations or acronyms can lead to numerous malfunctions.

- UETR: although the relevance of using Swift gpi is well established, the number of companies choosing to issue payments with their own UETR to enable payment traceability is still limited. The modernization of payment interfaces and systems could provide an opportunity to set up this service and make it fully autonomous.

- Date and Time: while the ability to add a time to the date in the Requested Execution Date tag may seem anecdotal at^{first glance}, it's an essential prerequisite to facilitate the use of instant transfer remittances by businesses.

Also to promote the use of instant transfers, the entry into force of European regulation 2024/886 represents a major turning point with 2 important dates:

- January 9, 2025:

o The cost of an instant transfer may not exceed that of a SEPA transfer.

o Requirement for PSPs in the EUR zone to be able to receive SCT Inst

- October 9, 2025:

o Requirement for PSPs in the EUR zone to be able to issue SCT inst

o Removal of the legal ceiling of EUR 100,000 (but a technical limit per establishment is still possible)

o Requirement for banks to provide a free service to verify the consistency of the account number and the name (or identifier) of the beneficiary (also known as Verification of Payee or VoP).

The latter service raises many questions about the conditions under which it can be implemented and used by companies. Without going into the details of the various options available to companies to ask their banks to control or not their payments, and to execute them or not, we would simply point out that all initiatives aimed at securing payments issued by individuals and companies are welcome, and that these solutions in no way call into question the organizations or technical solutions already implemented to secure transfer orders. By way of comparison, just as seatbelts didn't prevent the development of airbags, VoP services complement existing security systems. It's up to each individual to find the right level of service with his or her banks, and the right way to exploit the information transmitted according to the 4 possible statuses(Match, Close match, No match, Not applicable).

Finally, the work carried out by companies on their databases and payment interfaces can also be an opportunity to anticipate other major regulatory changes, such as the implementation of electronic invoicing. Corporate treasurers can therefore work to improve the flow of data in their payments, to facilitate the identification of paid invoices and their automatic reconciliation on both sides.

As we have seen, the ISO 20022 migration project has been underway for several years now, and comprises a number of more or less interdependent phases, each with its own timetable. However, if these phases are carried out correctly by companies, they will all be able to reap the benefits of greater confidence in the efficiency of their payment operations, both domestic and international.

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