This week EBA Clearing and SWIFT announced the start of a work programme to migrate the large-value payment system (LVPS) EURO1 to the ISO 20022 standard. The migration is scheduled to be completed by November 2021, in line with the deadline set for the migration of the Eurosystem’s TARGET2 platform.
The agreed programme responds to the need of the EURO1 participants for a continued alignment of the pan-European private-industry platform with TARGET2 in order to ensure full intra-day switchability between the two systems. It will also reflect user requirements to maintain the core components and benefits of EURO1 and to seek maximal alignment with other EBA Clearing services.
According to Hays Littlejohn, CEO of EBA Clearing, “The migration of large-value euro payments to the ISO 20022 standard is a major exercise for payment service providers across Europe. Our goal is to make this changeover as smooth and seamless as possible for our EURO1 participants by fully aligning with the migration plans and timetable of TARGET2.
Our goal is to make this changeover as smooth and seamless as possible for our EURO1 participants
“Our users have requested that the core of EURO1 stay unchanged: they still see a great benefit in a highly liquidity-efficient and cost-effective LVPS platform providing immediate finality for their payments and the possibility to flexibly switch flows between EURO1 to TARGET2.
“At the same time, many users are looking to strengthen their central payment monitoring and steering capabilities, which is why they have asked us to seek maximum alignment for EURO1, not only with TARGET2 but also with our STEP2 and RT1 Services.”
Gottfried Leibbrandt, CEO of SWIFT, said: “Our co-operation on this strategic programme will add another chapter to the successful partnership between SWIFT and EBA Clearing, which began 20 years ago with the delivery of the system.”
Proof of concept
SWIFT has been providing the messaging layer for EURO1 and acting as processing agent for the payment system operated by EBA Clearing since its launch in January 1999.
To give a first outlook on the cross-service deliverables to come, EBA Clearing and SWIFT presented a proof of concept of a liquidity dashboard in mid-2018, which provided an overview of the payment capacity and position of participants both in EURO1 and in RT1 based on existing EURO1 and RT1 application programming interfaces (APIs).
SWIFT also provides network services to connect to STEP2, EBA Clearing’s pan-European Automated Clearing House, which processes euro retail payments, and links the system with TARGET2 for liquidity transfers. From November 2018 on, participants in EBA Clearing’s instant payment system RT1 will be able to access the RT1 platform via SWIFTNet Instant.
EURO1 is the only private sector large-value payment system for single same-day euro transactions at a pan-European level and has been identified as a systemically important payment system (SIPS) by the European Central Bank.
EURO1 processes on average more than 200,000 payments per day with an average total value of about €200bn. The system currently counts 48 participant banks and reaches a total of over 20,000 BICs in and beyond Europe.