How to Create XML Payments in an SAP System

  • by Mary Loughran, Independent Consultant
  • Praveen Gupta, Consultant, e5 Solutions Group
  • July 30, 2015
Learn about the International Organization for Standardization (ISO) XML payment messages and how to create them using an SAP system. Learn the configuration steps required to create ISO XML payment messages.
Learning Objectives

Reading this article, you’ll learn:

  • The structure of the three components of an XML payment message
  • The important tags of different sections of pain.001.001.03
  • The relationship between pain.001.001.03 and pain.002.001.03 messages
  • The functionality in the SAP system to support ISO XML payment messages
  • Configuration steps to create an XML file for accounts payable and treasury payments
Key Concept

International Organization for Standardization (ISO) 20022 is a single standardization approach to be used by all financial standards initiatives and is a standard for electronic data interchange between financial institutions.

Extensible Markup Language (XML) is a markup language that defines a set of rules for encoding documents in a format that is both human readable and machine readable. The design goals of XML emphasize simplicity, generality, and usability. It is a textual data format with strong support via Unicode for different human languages. The design of XML focuses on documents.
 

The Common Global Implementation Initiative (CGI) is a collection of banks, corporations, software vendors, and consultants that have come together to progress various corporate-to-bank implementation topics in the payments and reporting domain. The main objective is to create common global implementation templates for International Organization for Standardization (ISO) 20022 corporate-to-bank transactions. The CGI team focused on developing agreed-upon templates for six transactions:

  • Customer Credit Transfer Initiation (pain.001.001.03)
  • Customer Direct Debit (pain.008.001.02)
  • Customer Payment Status Report (pain.002.001.03)
  • Bank-To-Customer Statement (camt.053.001.02)
  • Bank-To-Customer Account Report (camt.052.001.02)
  • Bank-To-Customer Debit Credit Notification (camt.054.001.02)

Note
Pain stands for payment initiation. Camt stands for cash management.

Pain.001.001.03 and pain.002.001.03 are the XML messages that were developed by the CGI team. XML messages are documents consisting of tags and elements that adhere to an XML schema, which is a type of an XML document. Some elements are required for proper file structure, and some are required for identifying a business object or containing payment-related information.

From the payment standpoint in this article, we focus on pain.001.001.03 and pain.002.001.03 messages. The last two numbers (03) represent the version of the message. We focus on the structure of these two message types, the various tags used, and the possible values. We also focus on how these tags can be populated in the SAP system. 

Pain.001.001.03, of which the last two numbers represent the version of the message, is currently the most used version of the ISO 20022 credit transfer message and is the payment standard moving forward. Pain.002.001.03 is an acknowledgment file generated from a pain.001.001.03 payment file. SAP supports the pain.001.001.03 format after SAP Note 1665873 - DME XML Format as per ISO 20022 (CGI_XML_CT) has been applied to the system.

Pain.002.001.03 is an acknowledgment file generated for a pain.001.001.03 payment file. In other words, when a company sends a pain.001.001.03 payment file to the bank, the bank sends a pain.002.001.03 acknowledgment file back to the company. SAP supports importing the pain.002.001.03 status report in the SAP Bank Communication Management module.

Note
The functionality that we describe is included in SAP standard ERP Central Component (ECC). No additional licensing is required. XML-formatted payments are a part of the order-to-cash process. To use the functionality mentioned here, a company needs to be making payments from an SAP system or be in the process of implementing payments from an SAP system. This article builds on our earlier article titled “SAP Bank Communication Management: What You Need to Know.”  

Mary Loughran

Mary Loughran has been specializing in the SAP Financials area since 1997 and has worked with numerous clients throughout North America and Europe in the areas of finance and treasury. She was employed as a consultant with SAP America and was a designated expert within SAP America for treasury before she left SAP in 2004. Mary’s expertise is in the areas of SAP Treasury and Risk Management, SAP In-House Cash, Liquidity Planner, Accounts Payable, payments from SAP in general, Cash Management, and Electronic Banking. Mary was an independent consultant from 2004 to 2016. 

See more by this author

Praveen Gupta

Praveen Gupta has been specializing in the SAP Financials area since 2005 and has worked on numerous projects in the areas of finance, treasury, legal, and product management. Praveen’s expertise is in the areas of treasury and risk management, accounts payable, electronic banking, cash management, payments and SWIFT. Since 2014, Praveen has been a consultant with e5 Solutions Group.

See more by this author


Comments

No comments have been submitted on this article. 


Please log in to post a comment.

To learn more about subscription access to premium content, click here.