I remember my first foray into ISO20022 XML payments like it was yesterday. The full payment layout was not yet there in SAP. I started down the path of setting up ISO20022 payment layouts with two thoughts in my head. "Well, the Payment medium workbench in SAP has an output option for XML so it must do something" and "If they can support the SEPA format, it must work on some level". And this began the journey.
Fast forward four years and a few implementations later, and it is exciting to see the progress that has been made. It's been great to see the SAP product evolve and the functionality to support XML payments become more sophisticated. It's also been nice to see SAP release a standard that we can use as a baseline and modify for these projects.
My interest in how XML standards can truly benefit customers and banks has continued and grown over the last few years. ISO20022 XML really is helping standardize the payments themselves. But standardizing the remittance to communicate what was being paid remained a challenge. At a conference a few years ago, I became aware of the Remittance coalition and their efforts. This group is a cross section of volunteers representing multiple participants in the payment chain (corporates, banks, clearing houses, etc.).
I've been volunteering as part of the Remittance Coalition the last few years. It's been a great experience to hear about the challenges in electronic remittance from many different perspectives. I've seen it firsthand with companies that have to decide how to remit payment information. Do they use CCD+, CTX, Extended remittance on wires? Or alternatively, just email the vendors remittance information on the payment and don't even send as part of the payment stream? It all gets very complicated very fast. Anyone in AR, AP, and Treasury reading this is probably wincing right now remembering this decision, and the ongoing implications of the various decisions.
Hope for a better solution is on the horizon. This spring, as part of work across multiple groups including this coalition, a new standalone remittance for XML was published- the message type is remt. The challenge is a big one- now we have the standard, but need the customers, banks, and software providers to support the standard. It's a classic chicken and the egg problem. But also exciting to see the first steps taken.
What do you think- will companies embrace a remittance standard in the same way they have a payment standard? Any ideas on how to solve the chicken and the egg problem for remittance?
If I've piqued your curiosity and you want to learn more about the coalition and follow what is happening, here are couple links to get you started:
Minneapolis Federal Reserve:http://www.minneapolisfed.org/about/whatwedo/remittancecoalition.cfm