For making payment, companies runs automatic payment program (F110 in sap) , this creates a payment file (XML DME format) which is sent to banks for doing transactions.
Till now companies were using varioius DMEE formats like flat TXT files or XML file. Unstructuted address was allowed in these files. But in future, comapnies need to provide strcutured address only. Files with unstrcutred address will be rejected by banks.
This requirement is applicable only for cross border payment, it's not applicable for domestic payments.
All banks need to comply with ISO 20022 which means banks must accept payment XML files from comapnies only when fully structured address or atleast hybrid strcutred address is present in XML file.
Deadline for companies to move to comply with ISO 20022
Globally companies were given deadline of 14th November 2026 to comply with ISO 20022. Which means after 14th November if payment file (XML) sent to bank does not comply with ISO 20022 standards then it will be rejected by banks.
But since most companies across globe is not ready for this change yet, hence this deadline is extended. As of now, no new deadline is pulished, which means few more months are there for companies to make needed changes in their IT system to comply.
What exactly is changing in ISO 20022?
Till now comapnies were sending payment file to banks where address was present in unstructured format. Which means address was present in a singe text field.
But as per new ISO 20022 recommendation, address must be structured. Each detail of address must be stored in seperate dedicated field.
<StrtNm>: Street name<BldgNb>: Building or house number<PstCd>: Postal code or ZIP code<TwnNm>: Town or city name (Mandatory)<Ctry>: ISO two-character country code (Mandatory)
Which means seperate field for Street, postal code, town name and country.
As per ISO 20022, town name and country is mandatory. Rest other fields like street, postal code etc are optional.
Structured address is needed for Debitor, Debitor agent, Ultmate Debitor, Creditor, Creditor agent, Ultimate creditor.
Debitor - Payer
Debitor agent - Payer's bank
Ultimate Debitor - If one comapny code paying on behalf of another
Creditor - Payee or receiver of money
Creditor agent - Payee's bank
Ultimate Creditor - Final receiver of money
SAP does provide ISO 20022 complaint XML payment file template (DME template). Companies just need to apply couple of SNOTE and ISO 20022 complaint template file gets created in sap. Complanies just need to copy this standard XML template given by sap and use it in FBZP.
There are two version of ISO 20022 compliant XML file provided by sap, Pain.001 version 3 or Pain.001 version 9.
Version 9 is the latest version provided by sap and it fulfills the requirement of all banks globally.This version 9 is availabel in SAP ECC as well as SAP S4HANA.
Here this the list of SAP NOTES which you need to implement to get ISO 20022 complaint xml template file:
SNOTE 2253571 - Its a master sap note which has many snotes insite it.
