Preparing for NAUPA III Adoption

Unclaimed property reporting in the U.S. is entering a new era. The National Association of Unclaimed Property Administrators (NAUPA) recently approved NAUPA III – a modernized version of its longstanding reporting standard. For many businesses, especially those operating across multiple jurisdictions, this shift brings both challenge and opportunity: updated requirements, new data elements, and new formats will gradually change how holder reporting, remittance, and compliance are managed.

At Trintech, we are closely monitoring NAUPA III developments and are starting the work of aligning our Unclaimed Property Compliance Solution (UPCS®) with the evolving standard. Our aim is to help finance, record-keeping, and compliance teams plan for a smooth transition – reducing disruption and unlocking the efficiency gains inherent in a more modern, structured approach.

It’s important for affected companies to understand what NAUPA III is, why it matters, how states are expected to adopt it, and how Trintech is preparing to support customers through this long-term transition.

What is NAUPA III (NAUPA 3)?

NAUPA III (sometimes called “NAUPA 3”) is the next generation of the holder reporting standard for unclaimed property. It represents a major modernization effort, replacing decades-old formats and codes with a more flexible, digital-first structure. The goal is to create a standard that can adapt to today’s data requirements while providing room for future growth.

Key changes include:

• Transition to XML Format: Moving from legacy fixed-width file formats to XML allows far more flexibility in data structure, added validation, richer data, and better extensibility.
• Expanded Data Elements: New fields are being introduced for holder, property, and owner data – including driver’s license information, foreign tax IDs, email addresses, phone numbers, last contact dates, and due diligence dates. Many existing codes are being reviewed, expanded, or redefined to improve consistency and clarity.
• New & Updated Property Codes: Property type codes will expand from four characters to five, with certain codes retired, others added, and many refined for more granular and uniform classification across states.
• State-Specific Extensions: While NAUPA III provides a national base schema, states will also have their own XML Schema Definitions (XSDs) to address unique statutory or administrative requirements. This balance provides consistency across states while allowing for flexibility where needed.
• Improved Validation & Automation: With XML formatting, mandatory fields, and richer metadata, reports can be validated earlier in the process. This reduces errors and rejections, while enabling greater automation and efficiency.

Together, these changes lay the groundwork for a more accurate, flexible, and future-ready approach to unclaimed property reporting – one designed to evolve with the needs of both states and holders.

Why NAUPA III Matters – Transition Challenges & Opportunities

As with any new standard, companies will need to weigh the timing and effort of adoption against their business priorities. NAUPA III is not yet mandated, and most states are expected to continue accepting NAUPA II for several years. Still, the shift will eventually require meaningful updates to systems and processes, making early awareness and planning valuable.

Transition Challenges

• System & Process Updates: Current reporting methods – particularly those dependent on spreadsheets or legacy fixed-width formats – will need to evolve. Manual workarounds that function today are unlikely to scale once states begin moving toward NAUPA III.
• Data Quality & Completeness: NAUPA III introduces more detailed data requirements (e.g., email addresses, last contact dates, driver’s license numbers). Organizations will need to ensure they can capture and manage this information consistently.
• Upgrade Planning: Because NAUPA III fundamentally changes file formats, property codes, and required fields, adoption will involve a major system upgrade once compliant solutions are available. Organizations should begin setting expectations and budgeting for this shift.

Opportunities & Value

• Greater Accuracy, Fewer Errors: XML formatting and enhanced validation will enable earlier detection of missing or misformatted data, reducing rework and submission delays.
• Efficiency & Automation: Moving to standards-driven workflows will streamline reporting cycles, lower costs, and free staff to focus on higher-value activities.
• Better Owner Outcomes: More complete data and more precise property codes will improve the ability to reconnect property with rightful owners – a central mission of NAUPA.
• Future-Ready Flexibility: The extensible schema provides a foundation to adapt to emerging financial products and technologies, such as digital wallets or cryptocurrencies.

Industry Status & Timelines for NAUPA Adoption

As with most regulatory shifts, the move to NAUPA III will unfold gradually and vary by state. While the standard has been introduced, broad adoption is still several years away and will occur in phases.

• NAUPA Development Complete: NAUPA has finalized the NAUPA III schema and gathered stakeholder feedback, providing the foundation for states to begin planning their own adoption strategies.
• State Adoption Outlook: Independent feedback from state administrators and industry experts suggests a staggered path.
  • States using Kelmar/KAPS systems (representing roughly 40+ states) may reach technical readiness by late 2026, with adoption beginning in 2027 or later.
  • States running internal platforms (e.g., Florida, Arizona, Hawaii) are expected to move more slowly, with readiness not likely until 2028–2029 or beyond.
  • During this period, most states will continue to accept NAUPA II files alongside NAUPA III submissions, ensuring a lengthy transition window.
• Technical Considerations for Holders: The shift from fixed-width formats to XML will be the most significant adjustment for many organizations. Updating systems, improving internal controls, and strengthening data quality practices will be important focus areas in the years ahead.

At Trintech, we are monitoring these developments closely and have begun the work of aligning our solutions with NAUPA III. Our focus is on ensuring that, as states roll out adoption plans on varying timelines, our customers will have a clear upgrade path when they need it.

How to Prepare for NAUPA III: Key Steps

Preparing for NAUPA III will take time and planning. Trintech has had its eye on NAUPA III developments for some time, helping prepare our customers with best practices to preparing for the transition (such as moving off spreadsheets, tightening controls, and embracing digital/automated methods).

While states are not expected to require the new format for several years, organizations can reduce future disruption by taking early steps now. These are practical actions companies can consider as they prepare for the transition:

Key Step	What to Do	What to Do
1. Inventory & Audit Your Data Fields	Catalog what data your organization currently collects, retains, and reports. Compare this against the NAUPA III schema (holder, property, and owner data). Identify gaps in data capture or retention.	A clear view of your data will highlight what needs to change once NAUPA III is adopted. Addressing gaps now prevents downstream challenges.
2. Plan for a Major System Upgrade	Recognize that NAUPA III adoption will require a significant upgrade to reporting systems once compliant solutions are available. Begin budgeting and allocating resources for that change.	Setting expectations early reduces surprises and allows for a smoother transition when vendors release updated solutions.
3. Strengthen Data Governance & Controls	Define ownership for data quality and privacy. Build audit trails and ensure sensitive data (e.g., email, driver’s license, foreign tax IDs) is collected and secured appropriately.	Enhanced data elements will require robust governance to protect sensitive information and ensure reporting accuracy.
4. Prepare Internal Teams	Assign project ownership, build a preliminary timeline, and begin educating relevant staff. Use this time to improve processes and reduce reliance on manual spreadsheets.	Teams that start preparing now will be better positioned to adopt NAUPA III without disruption.
5. Monitor State Requirements Continuously	Track announcements from states, as timelines and requirements will vary and may include state-specific schema variations.	Staying ahead of state-level developments will prevent last-minute surprises and rework.

Trintech’s Strategy & Commitment

At Trintech, we believe unclaimed property reporting is more than a compliance exercise – it’s an opportunity to streamline processes, strengthen governance, and improve transparency. As the industry moves toward NAUPA III, our focus is on preparing our solutions so customers can adapt when the time comes.

1. Planned Product Development
   • We’ve begun the work of aligning UPCS® with the NAUPA III schema, including support for new data fields, updated codes, and the XML reporting format.
   • We are designing flexible mechanisms to accommodate state-specific schema variations, enabling customers to generate compliant files across multiple jurisdictions.
2. Validation & Audit Readiness
   • Enhanced pre-submission validation will be built into the solution to check against NAUPA III schemas, reducing the chance of errors or rejected reports.
   • Automated logging and audit trails will help finance and compliance teams maintain evidence of data quality and lineage.
3. Preparing for Customer Upgrades
   • Adopting NAUPA III will require a major product upgrade for UPCS customers. We encourage organizations to begin budgeting and planning resources for this transition in advance.
   • Trintech will provide the updated software once NAUPA III capabilities are available; customers will manage their own adoption timelines based on state requirements.
4. Supporting the Transition Period
   • Because state adoption will be staggered, Trintech will continue supporting NAUPA II alongside NAUPA III for as long as needed, allowing customers to remain compliant during the transition.

What This Means for Finance & Compliance Leaders

For finance and compliance leaders, NAUPA III is not an urgent mandate today – but it represents a significant change on the horizon. Organizations that begin preparing early will be better positioned to manage the transition with less disruption, reduced costs, and greater confidence once adoption begins.

Practical steps such as strengthening data governance, reducing reliance on manual spreadsheets, and planning for eventual system upgrades will make it easier to adapt smoothly when states roll out their timelines.

It will also be important to work with a partner that understands the complexity of unclaimed property reporting – from varying state requirements to evolving file formats and validation rules. Trintech is preparing its solutions to support this transition, ensuring that when NAUPA III adoption begins, our customers have the software they need to move forward confidently.

Conclusion

NAUPA III represents a major evolution in unclaimed property reporting. It reflects the realities of modern data, shifting regulatory expectations, and the complexities of cross-jurisdictional compliance. For holders, it offers the promise of greater accuracy, automation, and transparency — provided organizations plan ahead and prepare for the transition.

At Trintech, we’ve begun the work of aligning our solutions with NAUPA III. Our focus is on delivering the updated software customers will need once states begin adoption, while continuing to support NAUPA II during the transition. By planning for change now, organizations can set themselves up for a smoother upgrade process and greater confidence in the years ahead.

Written by: Chris Witt