Key Changes in OBL Version 4.0

Version 4.0 of the Open Banking Standard has been shaped by several pivotal developments in the payments landscape. These include:

FAPI 1 Implementer’s Draft 2 Deprecation:

By the end of 2024, FAPI 1 Implementer’s Draft 2 will be fully deprecated. Banks and financial institutions continuing to use this outdated standard beyond this point will be at risk of non-compliance. The shift underscores the need for enhanced security protocols and the adoption of FAPI 1.0 Advanced Final.

Alignment with ISO 20022:

The new version includes key updates to align with ISO 20022, a global standard for electronic data interchange between financial institutions. This alignment will see the adoption of ISO 20022 code values and messaging, bringing consistency and alignment with globally recognised messaging.

Mandatory Changes to CHAPS Payments:

The Bank of England has published mandatory changes to CHAPS payments effective from 1st May 2025 that include specific fields and alignment with ISO 20022. These updates are crucial for ensuring compliance and the smooth processing of international transactions.

Enhanced Information Flows:

Version 4.0 also addresses the need for improved information flows to facilitate timely and definitive payment statuses. While many of these enhancements remain optional, they introduce valuable features like clear, consistent error messages and specific reasoning behind payment statuses—improving both transparency and reliability in payment processing. A particularly exciting addition is the new mandatory terminal state, ACCC, which significantly enhances the accuracy of payment status reporting. However, there is currently limited clarity on which banks will adopt this as part of the broader Version 4.0 rollout.

Impact on Yapily Customers

At Yapily, we are committed to minimising the impact of these changes on our customers.

Our approach includes:

Non-Customer Impacting Changes:

• FAPI Uplift to FAPI 1.0 Advanced Final: We will be upgrading our systems to comply with the latest FAPI standards, ensuring continued security and compliance without disrupting your services.
• Dual Running: As banks transition away from Version 3.x on varying timelines, we will support both old and new versions to handle any discrepancies that may occur. This process will be managed seamlessly behind the scenes to ensure uninterrupted service.
• VRP Consent Migration: Our team will handle the migration of Variable Recurring Payment (VRP) consents, with no expected impact on customer experience.
• ISO 20022 Code Value Handling and Mapping: This technical update will be managed behind the scenes, ensuring that all transactions are processed accurately and efficiently.

Customer-Impacting Changes:

Breaking Changes: We are assessing the necessity of the recommended mandatory fields and will provide guidance to assist you as the implementation date approaches.

Non-Breaking Changes (for customers using SDK v2.30.0 and above):

Optional Fields:

• Risk Object (e.g. CategoryPurposeCode): This field will enhance transaction monitoring and categorisation, aiding in better transaction monitoring
• Remittance Information: New options for including detailed remittance information, such as invoice numbers or payment references, will improve the reconciliation process
• Dynamic Reference for VRP: This update allows for more flexible and accurate tracking of Variable Recurring Payments and assist with reconciliation
• New Terminal BLOCKED Status: The introduction of a BLOCKED status will offer clearer visibility on payment holds by banks. This status indicates that funds are neither posted to the recipient nor returned to the sender, providing more transparency on the payment’s current state.

Timeline

CMA9 banks are required to upgrade to Version 4.0 by the end of March 2025. Although adoption is not mandatory for non-CMA9 banks, they are encouraged to consider moving to Version 4.0 to mitigate the risk of non-compliance.

Banks are currently assessing the implications of Version 4.0 and we expect to receive clearer guidance and direction from them by Q4 2024. Currently, no banks have committed plans for the implementation of payment status and error codes but we are regularly checking in with banks to understand their plans.

Preparing for the Future

As OBL Version 4.0 rolls out, Yapily is dedicated to ensuring a smooth transition for our customers. We are actively working to integrate these changes into our systems and will keep you informed of any updates and additional optional or mandatory fields that may affect your operations.

Our goal is to continue providing you with a secure, compliant, and efficient platform for all your Open Banking needs. We will give advance notice of any significant changes, and strive to allow a transition period where feasible to ensure a smooth adjustment to the new version.

Stay tuned for more detailed communications and guidance as we approach key implementation dates. If you have any questions or need assistance, please reach out to your account manager.