The SME world is abuzz with the subject of ISO 20022 – but what does ISO 20022 mean? How does the new standard for monetary transactions affect bexio customers? We have provided answers to the 4 most important questions below.
What does ISO 20022 mean?
Anyone who wishes to communicate with someone else without resorting to gesticulation and needs to communicate successfully has to talk the same language. It's just the same in the world of finance. The new ISO 20022 norm introduces a new, common standard in monetary transactions. The new standard for payments concerns three parties: You as an SME, software providers such as bexio, and banks or other financial institutions.
ISO 20022: ISO 20022-ready with bexio
We will ensure that bexio is ready in time. We are working closely with our affiliated banks to ensure that the requirements for the new payment standard are met in a timely manner. The necessary adjustments will be performed by means of automatic updates, so you can focus on your core business.
Why is there a new standard?
The goal of introducing the new standard is the harmonisation of international payments, in order to make monetary transactions more efficient: processes can be performed faster and more reliably. So far, international payment standards have existed alongside each other like different languages all around the world, and this has made communication in the finance industry more difficult. The desired automation of transmitted data is rarely achieved. Due to the simultaneous existence of various standards, human resources are required to exchange data successfully, acting as interpreters during the communication process. The ISO 20022 standard is designed to remedy this global problem.
How does this affect monetary transactions in Switzerland? Previously, there were two payment systems in Switzerland: one from PostFinance and one from the banks. The two systems employ different standards, which increases costs and lowers efficiency. The introduction of the new ISO 20022 standard means that the two systems now speak the same language. This doesn't only apply within Switzerland: the Swiss financial institutions are thus also harmonising their monetary transactions with the international Single Euro Payments Area (SEPA).
How does the ISO standard affect your SME?
The new standard affects the monetary transactions of your SME: for example the money transfers and account statements that you handle with your bexio business software.
As a bexio customer, you are working with so-called "standard software", so we as the software provider will ensure that you are provided with an updated version of the software which incorporates the new ISO standard. In constant collaboration with our affiliated banks, we will ensure that the bexio business software is updated in a timely manner and that we can also standardise your transactions, regardless of whether you bank with Credit Suisse, PostFinance, Raiffeisen, UBS or the Zürcher Kantonalbank (ZKB). Further financial institutions will follow.
What do I need to do? Don’t worry. We will take care of your monetary transactions through bexio with automatically installed free updates. As a Cloud provider, we will perform the required adjustments for you, so that you can focus on your core business.
We will ensure that monetary transactions conducted through the interfaces between bexio and our affiliated banks are adjusted to the new ISO 20022 standard in a timely manner.
- Matthias Paulus, Product Owner and Banking Expert at bexio
What will change with the new ISO 20022 standard?
What will change exactly with the new ISO 20022 standard for monetary transactions? It will affect SMEs in three ways:
1. Accounts payable processes
Transfers and payment orders will be sent in a new file format. The two previous file formats – DTA and EZAG (PostFinance) - will be replaced by the ISO standard pain.001 file format.
2. Accounts receivable processes and reporting / cash management
When payments are received, account information will be transmitted via electronic statements in a new file format: With the introduction of the new standard, the previous SWIFT MT940 file format will be replaced by the camt.053 file format (camt = cash management). The v11 files generated by those of your customers who use the orange inpayment slips will also be replaced by the camt.052, camt.053 and camt.054 file formats.
3. New payment slip
A new payment slip will be introduced in mid-2018. What will change? The seven different types of payment slip will be replaced by only one: the QR invoice with a payment section. It will replace the red payment slip (with message) and all orange payment slips with a reference number (ISR/BESR). The official name for what was previously an «Einzahlungsschein» (payment slip) will be «Zahlteil QR-Rechnung» (QR invoice with payment section). The most recognisable attribute of the new type of invoice is the QR code, a type of two-dimensional bar code. If the code is scanned with a smartphone - using an online banking app, for example – invoices can be paid with a single click. This avoids the necessity of laboriously typing in the 27-character reference number and standardises monetary transactions. QR invoices can be issued from the beginning of 2019.
Lastly: What is ISO?
ISO (International Organisation for Standardisation) is the world's largest developer of international standards. Over 21,000 ISO standards cover all aspects of business and technology. In addition to the global standardisation of messages relating to monetary transactions, ISO 20022 will allow the organisation to harmonise the electronic exchange of data between institutions.