The Importance of Data Structure: ISO 20022 and the Future of Payments

12 13 The Importance of Data Structure: ISO 20022 and the Future of Payments Treasury and Trade Solutions MT 103 Message — Remittance Information :70:/PURP/ GDDS ///ROC/END2ENDID-CIT001 23456789-448123455329///URI/CINV/ Z 0045400103 09-292021 03/21-21V.331 67824686784 -5486 793 / 1234001234567891+ Remittance Information The ISO 20022 format has an element with a detailed structure for remittance information. The extended remittance information within the MX message contains several possible source elements to enter MT remittance information, including ultimate debtor, ultimate creditor, purpose code, end-to-end- identification, related remittance information and remittance information. In the example above, an end-to-end identification and purpose code is successfully mapped to a MT message. However, due to character limits (four lines, each offering 35 characters) a lot of free formatted information is forced into blocks, resulting in remittance information being truncated. The introduction of a new element for remittance information allows for granular data inclusion within a payment, with structured remittance data such as invoice contract details, reference number and invoice itemized details, which can facilitate streamlined invoice reconciliation. This capability would benefit all corporates. Adoption of expansive and rich structured data results in a wider data set compared to today’s MX message format, improving reconciliation and invoice management. Moreover, it will reduce the number of service and investigation queries, driving an enhanced client experience and improved overall treasury management. 8 https://www2.swift.com/mystandards/res/cbpr/ISO_20022_Programme_UHB_Q2_2021_Edition_v1.0.pdf It is important to note that in a pacs.008 message there are two new dedicated elements (outlined below) that allow the use of extended remittance information. These elements have a distinct use and cannot both be present in the same payment. 1. Related remittance information. This relates to the handling of the remittance information by any of the agents in the transaction processing chain. This information is typically provided by the debtor in the payment initiation request. Related remittance information contains: • Remittance identification: A unique identification, as assigned by the initiating party, to unambiguously identify the remittance information. It is sent separately from the payment instruction, such as a remittance advice. • Remittance location details: A set of elements used to provide information on the location and/or delivery of the remittance information. • Method: How the remittance advice information is delivered. • Postal address: Where the agent sends the remittance information. The postal address identifies a specific location, as defined by postal services. This data element contains multiple tags which can be used for: ━ Structured address details, where components of the address are included in their respective tags. ━ Unstructured address details, where all information is included in a single tag, which can be repeated as required. 2. Remittance information. This is supplied to enable the matching of an entry with the item that the transfer is intended to settle, such as commercial invoices in an accounts receivable system. The structured element is nested, capturing rich structured remittance information. It is unlimited in its multiplicity, but must not exceed 9,000 characters of business information (this does not include the XML element identification). The use of this nested element should be bilaterally/multilaterally agreed, to ensure end-to-end transportation of this data. 8 Structured Additional Remittance Information Garnished Remittance Tax Remittance Invoicee Invoicer Creditor Reference Information Reference Document Amount Reference Document Information … … … … … … … Data Truncation Remittance information is among the most frequently truncated data points. • In this example, the End-To-End-identification and Purpose Code can be mapped in full to an MT message, while the Remittance Information is truncated because of character limitation. ISO 20022 pacs.008 XML message Example <CdtTrfTxInf> <PmtId> <InstrId> JD/150928/CCT001/1 </InstrId> <EndToEndId> END2ENDID-CIT00123456789- 448123455 </EndToEndId> <TxId> CITINY/12345/XYZGB/USD </TxId> <UETR> eb6305c9-1f7f-49de-aed0-16487c27b42d </UETR> </PmtId> <IntrBkSttlmAmt Ccy=USD> 10000 </IntrBkSttlmAmt> <ChrgBr> CRED </ChrgBr> <ChrgsInf><Amt Ccy=’USD’>1.00 </Amt></ChrgsInf> {…} <Purp> <Cd> GDDS </Cd> <Purp> {…} <Rmtlnf> <Strd> <RfrdDocInf> <Tp> <CdOrPrtry> <Cd> CINV </Cd> </CdOrPrtry> </Tp> <Nb> Z0000103 </Nb> <Dt> 2021-09-29 </Dt> </RfrdDocInf> <CdtrRefInf> <Ref> 03/21-21V.331667824686784 -5486793 </Ref> </CdtrRefInf> <Invcr> <Id> {…} <OrgId><LEI> 12340012345678912312 </LEI> Field limitation: 4 x 35 characters Remittance advices are typically considered a traditional value-added service provided by the debtor agent to the debtor, in order to provide remittance information to the creditor. This element can travel end-to-end within the pain, pacs and camt reporting messages. Remittance information is a dedicated element used both within pacs and camt reporting messages; this information can travel end-to-end using ISO 20022. Source: https://www2.swift.com/mystandards/res/cbpr/ISO_20022_Programme_UHB_Q2_2021_Edition_v1.0.pdf