Green light for SEPA 2.0


SEPA 2.0, i.e. the migration of the SEPA formats to ISO version 2019 of the ISO 20022 standard, starts in November 2021. The dreaded triple changeover consisting of a TARGET2 consolidation, SWIFT MT to MX and SEPA 2.0 has been averted through a gradual migration for SEPA 2.0. The remaining time must now be used intensively for preparations.

Note: distinction between DK and EPC applies to Germany



 The migration to the format specification of the German Banking Industry Committee (DK) valid from November initially affects the real-time credit transfer (pain001.001.09), the credit notification for incoming SCT Inst based on ISO 2019 (camt.054.001.08) and the formats for account information (camt.052, camt.053 and camt.054). Version 09 for real-time credit transfers is an extension of the SCT Inst formats, as the previous specifications (pain.001.001.03 without timestamp and pain.001.001.08 with timestamp) remain valid as before. A time-consuming exchange of existing formats at the customer-bank interface with extensive end customer integration is therefore not necessary for the time being and is postponed to a later date.

In November 2022, ISO version 2019 will continue with the inclusion of the Request to Pay (RTP) format specification into the DFÜ agreement. As this new standard will initially be included in the DFÜ agreement as an option, parallel activity to TARGET2 consolidation is not explicitly specified, but is reserved for financial institutions that wish to invest in improving customer experience.
The greatest effort for submissions by end customers will occur in November 2023, as the migration of the SEPA formats for credit transfers and direct debits is scheduled for this date. The remaining time should be used to prepare the necessary customer integration in order to avoid a postponement of migration dates as was the case with the mandatory SEPA introduction in 2014. 

Intensive preparation together with the customers involved is also urgently advised for the final phase of the SEPA 2.0 migration. In November 2025, the formats MT940 for previous day account information and MT942 for current day account information will cease to be the DK standard. Customers who rely on this information for their accounting must be able to process the account information in camt formats in the ISO 2019 version from this point onwards, which requires considerable effort and thus long and intensive preparation on the end customer side.

The changes associated with the implementation of SEPA 2.0 influence the interaction of formats in the processing chain and thus also the functionality of payment procedures. All internal bank systems that produce and/or receive change-relevant formats, as well as the supplying or receiving customers, are significantly affected. The risk of incorrect further processing or even the risk of payment rejections can be limited by addressing the issue at an early stage. In fact, added value can be created, processes can be holistically optimised and system functionalities can be increased by adapting and interlocking bank systems.

We are currently in the initial stage of the SEPA 2.0 migration. The effort required for the migration may not be reduced overall by the outlined equalisation of the migration steps, but it is at least easier to plan. We will closely follow the implementation and report on current developments here.  

Rebecca Stannull, Eric Waller

Single source of supply!

An IT outsourcing project usually brings together a whole range of experts from many different parties: the outsourcing company itself, the outsourcing provider as the future operator, the developers of the software used, migration experts as well as quite frequently a consulting firm for overall project management. This level of effort is not surprising in itself, as the processes involved are generally highly complex, have to be able to manage a number of interdependencies and – especially in payments – have almost no margin for error. It is perfectly valid to question whether it would not be more convenient from time to time if a single partner took charge of several parts of a project. After all, it is a well-known fact that the more parties involved have to be coordinated, the greater the friction.

This is one of the reasons why PPI AG has decided to offer not only consulting services and software for payments processing, but also operation of the respective platforms. With this payments as a service (PaaS) model, we are taking the next step towards becoming an all-round service provider in the European payments business.

So what exactly does that mean? Our customers can now have their PPI software operated directly by us in the cloud. They get all services from a single source – that includes the software itself, but also everything from consulting to the operation of the payments systems. Our offering thus covers the entire range of payments processing services. This takes the burden off our customers' IT departments and enables financial institutions to use their resources more efficiently and improve their competitiveness.

Why are we branching out into the operation of software solutions? The answer is simple: because it helps our customers to thrive in a rather crowded market environment. And because we have the skills for it: we have been successful in the consulting and software business for more than 30 years and have correctly anticipated the trend shift towards the increased use of cloud technologies. Over a year ago, we therefore entered into a cooperation with Broadridge Financial Solutions, a specialist for investor communication and technology-oriented solutions for financial institutions. It is not least thanks to this collaboration that we are able to offer our leading technology as PaaS.

Now is it all just pure theory? No, our comprehensive offering has already been tested in practice: Hamburg Commercial Bank (HCOB) relies on the PaaS solution. The initial setup of the project was classic: the bank wanted to migrate all customers to a central payments platform as part of a second-generation outsourcing and at the same time simplify its own business processes. At the core of the new architecture at HCOB is our TRAVIC suite as a standardised, multi-client capable, modern and hosted payments platform. In line with the customer's wishes, we have configured our operating environment in a way that allows us to control and monitor their payments end-to-end. The advantages of such a single-source outsourcing project became very clear as we were able to migrate the systems for cross-border payments to the new operating model after just twelve months – significantly faster than the projected one and a half years. What is more, it was achieved in times of the corona pandemic – and this should not be overlooked.

PPI's unique symbiosis of in-depth technical expertise and comprehensive development know-how makes such services possible. Offering operating models in the future was only logical given the trend towards outsourcing. To prevent friction caused by too many project participants, we accompany our projects from the initial planning stage to permanent operation from a single source – a complete all-round service package for payments.

You can find more information on our payments as a service offering here!


Hubertus von Poser

payments as a service; outsourcing; payments platform; all-round service provider; migration