Swift, EBA Clearing further ISO 20022 migration in Europe
Swift and EBA Clearing have started developing the process by which Europe's large-value payment system will migrate to use of the ISO 20022 messaging standard.
Swift and Paris-based EBA Clearing have established a November 2021 completion date for the ISO 20022 migration to the Euro1 large-value payment system. That date would coincide with a similar migration into the Eurosystem's Target2 platform.
The financial services organizations, which have partnered on payments processes throughout Europe for 20 years, seek to ensure seamless intra-day switching between both of the euro payment systems.
As a provider of secure financial messaging standards, Swift has long endorsed the use of the cross-border ISO 20022 standard because of its ability to include higher quality data with a payment transaction. In that regard, the standard essentially improves efficiency, transparency and compliance for payments systems of all currencies.
Swift has provided the messaging layer for Euro1 and served as the processing agent for the system operated through EBA Clearing since its launch in 1999.
"The migration to ISO 20022 is a significant inflection point in the payments industry that promises a new era of possibilities," Alain Raes, chief business development officer at Swift, said in a Wednesday press release. "Euro1 users can count on us to support them throughout and deliver the same robust security, resilience and reliability that are the hallmarks of the Swift network."
The first step in the development phase, to be implemented before the end of the year, will include a digital dashboard for users to better monitor transactions and liquidity.
EBA Clearing manages and operates the payments services of Euro1, Step1, Step2 and RT1.
Euro1 is the only private sector large-value payment system for single, same-day euro transactions throughout Europe.
Step1 is a payment system for single euro payments for small and medium-size banks, and Step2 operates as a pan-European automated clearing house. The RT1 system was launched in November of 2017 for instant payments.
"Since its launch, Euro1 has generated substantial cost savings for its participants and, with the migration to ISO 20022, it will be able to continue to do so in the future," Erwin Kulk, head of service department and management at EBA Clearing, said in the release. "We are striving to keep the Euro1-related efforts to a strict minimum for our users."
While the Swift and EBA collaboration provides clear direction for the messaging standard adoption, the U.S. has momentarily delayed its planned phased-in approach to the Federal Reserve's FedWire transactions. Instead of starting its first phase in November 2020, the Fed is studying calls for a migration that would avoid different phases and have all of the banks prepared in a similar time frame.
Swift says Euro1 processes 200,000 payments per day, on average, with a total value of more than 200 billion euros. The system currently counts 45 participant banks.
EBA Clearing was founded in 1998 as a payments infrastructure provider wholly owned by its shareholders — 51 of the major banks operating in Europe — with a country-neutral governing model.
Brussels-based Swift provides its messaging platform, products and services to more than 11,000 banks, securities organizations, market infrastructures and corporate customers across more than 200 countries and territories.