As part of our commitment to keeping you informed about important regulatory changes, we want to bring to your attention a key update that will impact transactions across Europe starting in 2025. The SEPA (Single Euro Payments Area) Credit Transfer (SCT) file format is undergoing a significant upgrade that will affect how businesses process payments.
What Is SEPA Credit Transfer?
SEPA Credit Transfer (SCT) is a standardised payment method that allows businesses and individuals within the SEPA zone to make cross-border Euro payments seamlessly and efficiently.
What Is Changing?
Starting in 2025, the SEPA Credit Transfer file format will be upgraded to comply with the new ISO 20022 standard. This new standard aims to enhance the interoperability, security, and efficiency of payment processes across the SEPA zone. The most notable changes include:
- New Message Structure: The file format will shift from the existing XML-based structure to a more advanced XML-based format, aligning with ISO 20022. This will introduce a richer data set, allowing for more detailed payment information and greater transparency.
- Improved Data Fields: The new format includes additional data fields, such as structured remittance information, which will allow businesses to provide more specific details about each payment. This can help improve reconciliation and reduce errors in transactions.
- Enhanced Security Measures: ISO 20022 includes new security features, ensuring that transactions are more secure, reducing the risk of fraud and data breaches.
- Extended Reference Fields: With the introduction of longer reference fields, businesses can include more detailed information when making payments. This is especially beneficial for multinational companies dealing with complex payments.
- Increased Efficiency: The new format will streamline payment processing, leading to faster payment transactions and potentially reducing delays in salary payments.
Why Is This Change Happening?
The shift to ISO 20022 is part of a broader effort by the European Payments Council (EPC) to modernise and harmonise payment systems across Europe. The goal is to improve the overall efficiency of SEPA transactions, ensure better data management, and support new payment innovations. This means a more streamlined payment experience and reduced risk of errors or delays.
What Do Parolla Customers Need to Do?
To prepare for the SEPA Credit Transfer file format changes, Parolla customers should start reviewing their current systems and processes to ensure compatibility with the new standard. Here are some steps to consider:
- Update Your Systems: Ensure that your internal finance systems are ready to handle the new XML-based ISO 20022 format. This may require software updates or additional configurations.
- Train Your Team: Make sure that your team is aware of the new requirements and trained to handle the updated format. This will ensure a smooth transition and minimise any disruptions to your processes.
Key Dates to Remember
- 2024: SEPA banks and financial institutions will begin offering test environments for the new ISO 20022 format. This is the perfect time to start testing your systems and preparing for the transition.
- 2025: The new SEPA Credit Transfer file format goes into full effect. All Parolla produced SEPA files to comply with the updated ISO 20022 standard.
How We’re Supporting You
Our team is already working to update our systems in line with the new SEPA Credit Transfer file format and will keep you informed every step of the way. We’ll provide detailed guidance and support to ensure your processes remain seamless and compliant.
If you have any questions or concerns about how this change will impact your processing, don’t hesitate to reach out to our customer service team. We’re here to assist you!