The journey to ISO 20022: Worldline’s CSM and the T2-T2S consolidation

The high stakes of the T2-T2S consolidation

The payment ecosystem has changed significantly in recent years, requiring banks and market infrastructures to evaluate and transform their legacy systems. The T2-T2S consolidation project was a modernisation initiative of the European Central Bank, to address the requirements and anticipations of market participants and improve the efficiency of Europe’s financial markets. The project involved various enhancements to the Eurosystem’s TARGET services, e.g. T2 has replaced TARGET2 as the new real-time gross settlement (RTGS) system for settling payments. The ISO 20022 messaging standard has also been newly introduced within this payments area, enabling harmonisation and interoperability across domains.

The connection to T2 was successfully implemented over the weekend of 17-19 March. On 20 March, the Worldline's SEPA Clearing & Settlement Mechanism (CSM) started settlement and received positive confirmation of T2. In total, 16.5 million transactions with a value of 10.2 billion euros were processed seamlessly on that day. The processing has been successful ever since, without any delay or incident raised because of the migration.

As Leon Ruijs, Project Manager, states, “The migration to T2 was one of the biggest migrations in the payments landscape of the last decade. There was no possibility of fall back. So no option to fail. I am proud that the Worldline project team seamlessly migrated the Dutch CSM community without any bank customer noticing.”

Worldline’s key contributions to this successful migration

A migration of this size and importance comes with complexity. It includes a multiple-entity model with Worldline's settlement community of 29 banking institutions, in which Worldline is also connected to 10 other CSMs. All of these entities had newly adapted systems involving new infrastructure and enhanced application landscapes as part of migrating to the ISO 20022 standard.

All operations related to the new T2 system had to commence on the go-live and first working day, 20 March. Worldline's close communication and coordination with the banks, CSMs and De Nederlandsche Bank (DNB) was crucial to the success of the migration. The short communication lines, excellent support from all parties and high level of participation in all stages of the migration have led to this success.

Worldline’s knowledge and expertise added value throughout the project, which was also demonstrated by quick response to community queries and coordination, e.g. collecting and sending bank migration data on behalf of the banks within the settlement group. In addition, Worldline has shown its commitment, knowledge, and expertise among the project members. It assured a smooth migration through a high intensity of testing with all parties, in the form of mandatory test cases and quality assurance via banks’ self-assessments.

How does a migration like this impact Worldline and its customers?
Worldline can continue its CSM business with the trust of its customers, and Worldline’s CSM customers can securely move forward, knowing that this part of their business is fully compliant. After this program and its success, it has become even more apparent that our customers trust Worldline’s guidance and expertise in complex, large-scale compliance projects. It has demonstrated the presence and success of the close cooperation with DNB and the community.

As Bayoe Wongsosumarto, Product Manager, shares, “A good working payment system, just like with utility services and the internet, are often taken for granted by the greater public. Something so fundamental to any modern society should ‘just work,’ and on March 20^th at the go-live date of the T2-T2S consolidation, it did work. Because this is what we do, to facilitate and process millions of transactions between payers and beneficiaries. Therefore, I would like to heartily applaud all my colleagues who have worked on this project and brought it to a successful closure. Knowing in the back of my mind, that if similar titanic projects come in the future, we are certainly able to handle them.”

What can we expect in the future?

On 19 November 2023, the European Payments Council compliance changes will go live, ensuring Worldline’s settlement community is compliant with all of the new SEPA formats. Furthermore, on 8 April 2024, Worldline will comply to all applicable mandatory changes resulting from the new Eurosystem Collateral Management System (ECMS).

Learn more about Worldline's Clearing & Settlement Mechanism solution.