Payment initiators, start using structured data now
The payments industry’s transition to the ISO 20022 format standard for payments and reporting (known as CBPR+) is already more than one year further into its co-existence period with the legacy MT and the future MX message formats. Similarly, recent changes to the SEPA Rulebook went live in March 2024.
While these changes cover mostly interbank messages, they do impose some requirements on the underlying payment initiators. Specifically, the new interbank guidelines will mandate the use of “structured address data” when initiating payments. “Structured address data” refers to the use of specific data elements for each address component that makeup the full address of a party involved in the payment. For example, “Street Name” is an example of a structured address data element.
It is important to understand in which cases a counterparty address is required:
| Payment type | No counterparty address required | Counterparty address required |
|---|---|---|
| International Credit Transfer | X | |
| SEPA Credit Transfer | X | |
| SEPA Direct Debit (within EEA) | X | |
| SEPA Direct Debit (outside EEA) | X |
Fully structured vs. hybrid
The original requirement of CBPR+ implementation was to mandate the use of only fully structured address data from the end of the coexistence period (November 2025). However, based on reactions from the market, the hybrid address model was introduced and will be supported from November 2024.
“Fully structured” means that each address element is individually populated in its own specific field. In a hybrid address structure, some address elements may be submitted in unstructured address line fields. The options available to you will depend on the underlying payment initiation format(s) you utilise.
You may submit your counterparty in either fully structured or hybrid format, but we recommend using the full structured format as a future-proof option. The minimum requirement when submitting a counterparty address is to have at least the counterparty’s CITY and COUNTRY populated in structured elements. We strongly recommend providing the full address when required, as we observe correspondents increasing their scrutiny in this area, resulting in more requests for information (“RFI”), delays, and/or returns due to their omission.
The deadline for the mandatory use of structured or hybrid data elements is November 2026. Afterwards, ING may not be able to execute payments initiated with insufficient or unstructured counterparty address information.
Start now with structured data
If you initiate payments using a format that does not support structured address elements or submit only unstructured counterparty addresses, we recommend upgrading to a format that supports at least thehybrid address model. This will help you avoid disruptions to your payments process.
We advise you to start taking an inventory of your counterparty data and to create processes to collect/correct/update your data accordingly. If not already doing so, upgrade your payment initiation formats to be able to submit structured address information. If a vendor ERP/TMS package is involved, start the discussion to ensure that you have the appropriate time to test and deliver the required versions before the deadline. Our recommendation is to use the ISO 20022 pain.001.001.09 standard.
Examples of the counterparty address information found in commonly used initiation formats used by corporates can be found below, both in unstructured and structured format.
More changes to be expected
As ISO 20022 is adopted more and more in the interbank space, additional requirements can be expected. These can include the use of regulatory reporting fields, purpose of payment, or a change of supported payment initiation formats.