TARGET2 Does Not Exist Anymore: What Went Live on 20 March 2023

TARGET2 stopped operating after business on Friday 17 March 2023, and the new TARGET services went live on Monday 20 March 2023. The weekend was a planned big bang cutover, not a gradual migration. Banks closed their TARGET2 accounts, including their payment module accounts and home accounts, and opened new accounts in the T2 service. A bank that sent a EUR 50 million payment on Friday used TARGET2, while the same payment on Monday travelled through T2, the new real time gross settlement service. There was no period when both systems ran in parallel for live euro settlement. The cutover changed the account structure that every euro bank had to learn. Under TARGET2, a bank held a payment module account at its national central bank, and liquidity sat in that single account. Under T2, a bank holds a Main Cash Account in the Central Liquidity Management service, plus one or more Dedicated Cash Accounts for RTGS, T2S and TIPS. A bank such as Deutsche Bank, with BIC DEUTDEFFXXX, now manages its euro liquidity from its Main Cash Account and moves funds to its RTGS Dedicated Cash Account when it needs to pay. The separation is deliberate, and it changes daily liquidity work. The message standard changed at the same time as the accounts. TARGET2 used the MT standard, with MT103 for customer payments and MT202 for bank to bank payments. T2 uses ISO 20022, with pacs.008 for customer payments and pacs.009 for financial institution transfers. A EUR 2 million customer payment that once arrived as an MT103 now arrives as a pacs.008, with structured debtor and creditor data, a clear purpose code and richer remittance information. Banks had to rebuild their payment engines, their screening systems and their reconciliation routines to read the new format. The cutover also changed how banks connect to the system. TARGET2 banks connected through SWIFTNet FIN and the older TARGET2 network services. T2 banks connect through ESMIG, the Eurosystem Single Market Infrastructure Gateway, which is the single entry point for T2, T2S and TIPS. A bank sends one ISO 20022 message through ESMIG, and the gateway routes it to the correct service. A payment of EUR 750,000 from BNP Paribas in Paris, BIC BNPAFRPPXXX, to Intesa Sanpaolo in Milan, BIC BCITITMMXXX, now enters through ESMIG and settles in the RTGS component of T2. People still say TARGET2 in meetings, in training rooms and in project documents, but the name is now wrong for live work. TARGET is the current name for the whole set of services, and T2 is the service that settles large value euro payments. A business analyst who writes TARGET2 on a new design document will confuse developers, testers and operations teams, because the accounts, the messages and the connection are all different. Use TARGET for the family of services, T2 for the large value service, and 20 March 2023 as the date the old system closed for good. Worked example with numbers: a mid sized German bank held EUR 120 million in its TARGET2 payment module account on Friday 17 March 2023, and over the cutover weekend it closed that account and opened a Main Cash Account in CLM plus an RTGS Dedicated Cash Account. On Monday 20 March it moved EUR 80 million to the RTGS DCA with a camt.050 liquidity transfer, kept EUR 40 million on the MCA for central bank operations, and sent its first pacs.008 for EUR 2 million to a supplier bank in Milan. The payment settled in seconds, and the bank reconciled it against the pacs.002 status report and the camt.054 debit notification that arrived through ESMIG the same morning. Failure and recovery: a cutover fails when a bank has not mapped its old TARGET2 accounts to the new structure, and the failure shows up on the first business day as a payment that cannot settle because the RTGS DCA holds no funds. The recovery is a same day camt.050 transfer from the MCA to the RTGS DCA, but if the bank has not set up its CLM access, it cannot move the funds at all, and its payments queue until its national central bank helps it. A bank that tested the cutover with a rehearsal in the months before March 2023 caught these gaps early, while a bank that tested only its message formats discovered them on the Monday morning when its customers were already waiting. For a business analyst, product owner or subject matter expert, the cutover requirement must name the old account and the new account for every payment type, and must state that TARGET2 is a retired name that must not appear in any live requirement, test case or customer document after 20 March 2023. The requirement must also state that T2 uses ISO 20022 with pacs.008 and pacs.009, not MT103 and MT202, and must map every old MT field to its new ISO 20022 equivalent, because a migration that carries the old names into the new system will confuse operations teams for years. Source: European Central Bank, TARGET services; last reviewed 7 November 2026.