With payment market infrastructures of all major currencies either live, or in the process of adopting ISO 20022, the SWIFT community has decided it is now time to adopt this financial standard to further enable the modernisation of cross-border payments.
The rich, structured data enabled by ISO 20022 from end to end will drive the next stage of correspondent banking transformation with improved speed, efficiency, and compliance.
Over the past six months, the Cross-Border Payments and Reporting Plus (CBPR+) working group, a working group overseen by the Payments Market Practice Group (PMPG), has been defining the usage guidelines for consistent use of ISO 20022 in cross-border payments.
The first four Payments Clearing and Settlement (pacs) usage guidelines are now available on SWIFT's MyStandards web application. These guidelines are available for download in multiple formats and supported by the MyStandards Readiness portal for testing.
The guidelines are designed to ensure the quality and consistency of data exchanged on the SWIFT network for:
- pacs.008 - FI to FI Customer Credit Transfer.
- pacs.009 - FI to FI Institution Credit Transfer.
- pacs.002 - FI to FI Payment Status Report.
- pacs.004 - Payment Return.
The CBPR+ group will continue to define further usage guidelines aligned with the High Value Payment System (HVPS+) guiding principles, ensuring interoperability with domestic high value payment processing. Further usage guidelines and functionalities to support the adoption of ISO 20022 will include:
- Translation rules to and from the existing MT message types.
- Translation utilities in-network, over APIs and as part of integration products.
- An interactive and online translation sandbox.
ISO 20022 will modernise international and domestic payment rails, enabling richer and new payments services. The adoption of ISO 20022 will also benefit corporate payments. It will allow for rich invoice and tax information, originator and beneficiary details, and necessary regulatory information for beneficiary jurisdictions. Increased use of mandatory and structured data will also further enable automation of reconciliation processes and improve visibility of cash positions for beneficiaries.
Moving to ISO 20022 message standard is HUGE
Deutsche Bank’s Ultimate guide to ISO 20022 migration on the impacts of standardising on a new payment message format is a must read
Swift group to develop ISO 20022 guidelines for cross-border payments
A working group of payments experts will aim to develop a common set of standards that can be introduced globally.
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The Nacha Corporate Experience aims to combine standards and technology to deliver a more efficient payments experience for corporates