From November 2026, payments to employees can bounce if you do not have the city and country in the bank file. Why this is an issue for HR teams is because country and, in particular, city are not always gathered from employees and stored in the HCM.
Following the ISO 20022 22 November 2025 cross-border migration milestone, organisations are now operating in a payment environment that relies on structured ISO 20022 messaging rather than legacy formats when making payments.
For employers, the risk is: salary payments can still be delayed or rejected even when payroll calculations are correct. In many cases, the issue is not payroll policy, but payment data. As validation rules tighten, fields such as Town/City and Country are becoming increasingly important and missing, or incorrectly mapped details may result in payment repair or rejection.
The main impact scope covers cross-border payments and RTGS (Real-Time Gross Settlement – high-value payments). While most Automated Clearing House (ACH) payments in APAC are not currently impacted, this should still be checked on a country-by-country basis. For example, Malaysia and Thailand ACH giro payments are generally understood to be out of scope. However, if ACH or batch payments exceed a certain threshold and are converted into high-value transactions, ISO 20022 requirements may still apply.
While the main migration milestone has passed, the ISO 20022 programme is still evolving. Many organisations are now focused on stabilising post-migration operations, preparing for the November 2026 structured address requirement, and planning for further changes through 2027 and 2028.
Below, we answer the most common questions and outline the practical steps employers should take now.
What does the November 2026 change mean for businesses?
From that point, payment messages will need to use structured or hybrid postal addresses. Fully unstructured address fields will no longer be acceptable for in-scope transactions.
Where hybrid format is used, some banks, eg, Citi, have indicated it will support this for the next couple of years, although no firm end date has been confirmed. Even so, the overall direction from banks is to strongly recommend moving towards structured address formats wherever possible.
What is the main operational concern for 2026?
Data quality, especially address data. If Town/City and Country are not captured correctly in structured fields, payments may face higher rejection rates or require manual repair by banks.
This is especially important for organisations making cross-border or high-value payments, and for payroll teams that rely on employee data from an HCM that may not currently store these fields in a usable format.
Are MT103 messages still relevant?
They may still appear within certain internal systems, but cross-border payment processing is now moving towards ISO 20022 MX formats such as pacs.008 and pacs.009.
What file types are affected?
Both flat files and XML files may be in scope. For flat flies, city and country may need to be placed in Address Line 3, or in Address Line 2 where a third line is not available.
This means that organisations should review not only their payment message standard, but also the file layout rules set by their banking partners.
Is address always mandatory?
Whether address data is mandatory depends on the payment type, the country involved and the specific bank file requirements. Bank validation generally applies when address information is provided in the bank file.
If address is not required for a particular country or payment type, it may still remain optional. However, where country is provided, banks may validate whether the country code follows the correct ISO standard, even if the city name itself is not validated. To avoid the risk of bounced payments, most banks are recommending to include country and city information for all payments.
What is the best place for organisations to begin?
A good starting point is to review address data, decide whether hybrid or fully structured address formats are more suitable, and test payment files well ahead of the November 2026 deadline.
Rather than treating ISO 20022 as a one-time migration, organisations should treat it as a data readiness project. Key actions include:
- Mapping where payroll payments cross borders
- Auditing employee address data
- Clarifying ownership of payment data across HR, payroll and finance
- Confirming provider readiness with payroll vendors and banks
- Testing payment files before major validation deadlines.
- Checking country-by-country payment requirements, especially for ACH and giro requirements.
- Reviewing whether high-value or urgent payment scenarios could bring otherwise routine payroll payments into scope.
What can go wrong with salary payments?
When payment data fails validation checks, banks typically respond in two ways:
- Repair: The payment is paused so missing data can be corrected. This can delay settlement and require manual intervention.
- Reject: The payment fails validation and must be corrected and resubmitted, which creates a higher risk close to payroll cut-off.
In practical terms, this means employees may not be paid on time if city and country data is missing from the bank file for in-scope transactions. That is why banks are recommending that organisations begin collecting and storing this information now, even if not all payment types are immediately affected.
Important Dates to Take Note of Between 2026-2028:
| Date | Summary |
| 1 Jan 2026 | Charges begin for certain contingency or translation methods where these are still used. |
| Nov 2026 | Structured or hybrid addresses become mandatory, alongside Phase 1 Case Management requirements. |
| Nov 2027 | Phase 2 Case Management begins, with structured E&I messaging becoming mandatory and translation support ending in key areas. |
| 2028 | Migration of statements and reporting continues, with further retirement of legacy message types. |
While the transition introduces new operational considerations, the long-term goal of ISO 20022 is clearer and more reliable payments. Structured payment data improves reconciliation, transparency and automation across global payment networks. For employers managing international payroll, stronger data quality ultimately reduces payment failures and improves overall payment resilience.
Have questions about ISO 20022 and how it may affect payroll payments? Speak with our team of 2,900+ professionals to learn how stronger payroll data management and payment workflows can help reduce avoidable pay-day disruption.