On the Home Stretch – Test Environments for SIC5

Required knowledge

• Familiarity with interbank payment processes 
• Knowledge of the SIC IP Service Manual

3 July 2023 is the big date. The SIC5 project provides the first evidence that instant payment is coming to Switzerland – not yet for end customers, but for system participants and core banking software providers in the test system. For months, internal tests at SIX ran at full speed to reach this important intermediate stage.

The biggest challenge for participants in the SIC IP service is the short life cycle of an instant transaction. The recipient must clarify within a few seconds whether it accepts a payment or not, and at the same time trigger a confirmation. This is challenging when combined with 24/7/365 operation. However, feedback from the participants shows that appropriate solutions are available.

The Virtual Participant

A new function of the test system assists the recipient banks by providing a virtual participant for running through different test scenarios at any time, if required. This is particularly helpful if no test partner can be found for bilateral coordination – when it comes to confirming an accepted payment to the sender bank, for instance.

A possible test sequence:

1. Conformity check of messages
   The validation portal for interbank messages is used for the offline technical validation of instant payment messages.
2. Ensuring accessibility
   Many participants focus on primarily testing the specified availability. To do this, they must have test partners that can send payments to them. If no test partner can be found, the virtual participant can help. This sends the required test payments – and is also individualized. This allows the recipient bank to feed the virtual participant with its own IBANs, customer names or other elements via CSV upload. As an instructed participant, the participant can trigger individual payments to itself and thus set up corresponding test scenarios.
3. Sending instant payments
   The virtual participant can also be useful for outgoing payments. It accepts an instant payment and responds to it, as requested, with a positive or negative IP feedback, a reason code. If necessary, it does not respond at all.

Whitelisting

A frequently identified problem in testing is the use of production data in the wrong test environment. A whitelisting ensures that this can no longer happen. If a participant wants to send a customer payment to another participant, this participant must enter in its master data that the other may send payments to it. This significantly reduces the risk of unintentionally receiving incorrect data.

In order to be able to trigger messages in principle, SIX offers the “Validate only” option. All participants in the SIC IP service can be addressed here, as the settlement is only simulated. The response to a correct payment is a confirmation of execution – as if the payment had been settled.

Software Companies as SIC Participants?

In order to enable core banking software manufacturers to directly test the capability of their products for instant payment, they are approved for the test environments. They are activated as default participants in the same way as for financial institutions, which allows them to initiate and receive all instant payment types (including customer payments). A suitable SIC interface and proof of the need for testing are required.

Bank Master and Deselection of Customer Payments

Information on participation in the SIC IP service will of course also be published in the bank master in the new Version 2.1. This will apply from 18 November 2023. At the same time, the somewhat outdated bank master is being dusted off and re-released as Version 3.0. This version will replace Version 2.1 in November 2025.

The SIC IP service ushers in another innovation. Until now, a SIC participant could always assume that it could send all types of payments to other participants. This will change from November 2023, as participants will be able to opt out of customer payments. However, this function does not only affect participants that activate it. As a result, all other participants will no longer be able to send customer payments (whether instant or not) to such participants. This information is also published in the bank master or in the master data messages (reda.017) of the SIC RTGS service.

Onboarding

The registration window for participation has almost closed. At the end of June, 
the deadline will also expire for participants who voluntarily use instant payment in Phase 1 (as of August 2024). The registrations show that these institutions process over 98% of customer payment traffic. This means that from August 2024 instant payment will be available on a nationwide scale. It is very encouraging that more than half of the participants are already planning to send instant payments in the near future.

Bruno Kudermann
Senior Product Manager, SIX