ISO 20022 / UNIFI Standard

ISO 20022 - Advancing the Harmonization of Cross-Border Payments. Read our article about the upcoming changes in Switzerland.

Harmonization of Payment Transactions According to ISO 20022

ISO 20022 or the UNIFI standard (short for UNIversal Financial Industry message scheme) aims to harmonize global financial messaging and reporting standards. To this end, a uniform development and modeling process is specified for new messages. The standard is used for the exchange of information between customers and banks as well as among banks themselves. It affects transfers, direct debits, payment slips, as well as advisories and reporting.

The Role of Switzerland

In August 2014, the EU migrated its payment transactions to SEPA (Single Euro Payments Area), with Switzerland actively participating and being connected to the SEPA area. In October of this year, SEPA will also be introduced in several non-EU countries, including Switzerland. With the conversion and harmonization of payment transactions under ISO 20022, Switzerland will thus largely adapt its standards to the European system. A new reporting system will be introduced for transfers and the IBAN will be exclusively used. The direct debit procedures LSV+ and BDD are being replaced by Swiss Direct Debit (CH-DD) of PostFinance, LEON of Swiss banks, and SEPA Direct Debit (SDD) of the SEPA region. The procedures in the area of advisories and reporting are fully harmonized based on ISO 20022 and the messages are also delivered via a new reporting system, which is faster and at the same time more secure. For the payment slips, the current diversity is reduced to a single slip equipped with a QR code. All actors in the payment transactions are expected to benefit from the new standard, thus maintaining the competitiveness of the Swiss economy. Since the beginning of 2016, CHF transfers have already been processed based on ISO 20022. The standardized payment slip can be used from 2018 onward, and from 2019, direct debit will be combined with e-billing, to name just a few milestones. By 2020 at the latest, all changes should be completed. SMEs are now challenged to update their financial software in time so that the transition can be completed smoothly.