As many of you are aware, the Bank of England has a programme underway to replace the CHAPS payment system by 2025.
The key benefits of the replacement programme are:
More details can be found here.
As part of their engagement with key market participants, the ACT was invited to a meeting with key members of the replacement programme to better understand:
- Impact of COVID-19 on payment volumes including CHAPS, change programmes/cash preservation
- General catch-up on CHAPS (including Fraud, Liquidity, CHAPS/FPS usage)
- ISO 20022 Purpose Codes
To help prepare for the meeting the Policy and Technical team reached out to its group of over 100 treasurers who they reach out to on a regular basis to answer specific questions that arise.
Treasurers told us that:
- Customer receipts were significantly lower this year
- Card processing volumes were significantly higher this year
- In implementing Confirmation of Payee:
- As standard pre-approved templates were set up using IBAN numbers rather than sort code and account number, there was a need to change the templates so that payments could go through the checks at the beneficiary bank end. This led to payments taking longer to be processed
- It was noted that various banks exclude their SSI accounts from the scope of Confirmation of Payee which meant that when settling FX and MM deals to bank SSIs the confirmation failed which was both disconcerting and caused delays to payment approvals
- Payment processing:
- Larger payments are sometimes held due to accounts not having received their large receipts
- Payment projects:
- Working from home has delayed the migration of legacy banking portals to Group Portal
- Concern over pre-approved payment templates in relation to any changes in the payments landscape
- Concern over migrating existing payment templates following adoption of ISO20022
Purpose Codes
The meeting also discussed the work being done on Purpose Codes. These codes and the higher-level categories can improve the ability of beneficiaries to “tag” incoming receipts to improve payment allocation and reconciliation. Additional benefits can seen in the table below – taken from a report from the Bank on ISO20022.
If anyone in your organisation would like to input into the discussions over purpose codes, please don’t hesitate to drop a note to technical@treasurers.org.
