A ground-breaking agreement on international cooperation towards ISO 20022 has been reached following a roundtable meeting. The April 2015 meeting saw broad agreement that ISO 20022 was now the ‘de facto' standard in this area - over 40 financial institutions, international clearing houses, payments associations, payment schemes and supply-side representatives from around the world met in London to coordinate plans relating to the use of ISO 20022 for real-time payments.
Global interoperability of real-time payments systems will require harmonisation of standards and the roundtable reached consensus on the benefits of working together to understand what can be done collaboratively to ensure the greatest chance of interoperability in the future.
As the market has evolved, differing implementations of ISO 20022 for real-time payments have emerged and while the roundtable participants agreed these differences need to be embraced, it was decided the time is right to seek commonality and convergence.
Attendees agreed the next steps towards drafting the technical documentation much needed to advance harmonisation and set a determined target. A new set of messages does not need to be developed, but the aim is to deliver an initial variant of ISO 20022 messages for real-time payments delivered before the end of summer 2015. The ISO 20022 Real-Time Payments Group (RTPG) was set up to take this forward. Payments UK facilitate the work of this group; more information on the RTPG can be found here.
The progress has been marked by the publication of a new beginner’s guide to the emerging international ‘de facto’ standard for real-time payments.
Drawing on the conclusions of the meeting, a Q & A explaining ISO 20022 and the UK’s role in its implementation for the payments industry is available below.
What is ISO 20022?
ISO 20022 is an international standard developed to facilitate electronic data interchange between financial institutions. It supports interoperability between all parties in the payments process.
However ISO 20022 is not only a group of message standards. It was created by the International Organisation for Standardisation (ISO) as a new way to develop message standards within the financial industry – a standard to develop standards, so to speak.
Why do standards matter?
Financial institutions exchange massive amounts of information with their customers and among themselves in the course of delivering the services we all use every day. ISO 20022 offers a more efficient way of developing and implementing message standards that will serve as a basis for long-term solutions.
Historically these complex financial communications evolved into formats based on national or regional boundaries, but ISO 20022 has been developed to reflect the global nature of the financial services industry.
What are the benefits of ISO 20022?
ISO 20022 is a single, common ‘language’ for all financial communications – no matter where the business is based. It allows participants and systems in different markets to ‘talk’ to each other using consistent terminology and formatting.
This has particular benefits for international financial communication between financial institutions, their clients and the domestic or international ‘market infrastructures’ (like payment schemes) involved in the processing of financial transactions. Work is being focussed in this area first.
There is also a strong opportunity to use ISO 20022 for the development of new domestic financial messages between financial institutions here in the UK.
Is ISO 20022 being used in the UK yet?
The UK has deployed ISO 20022 messages for the Cash ISA Transfer Service and for the Current Account Switch Service.
What is the UK doing to roll out ISO 20022?
As the collaborative body for the payments industry in the UK, Payments UK has been working to ensure any future collaborative change or innovation by the collaborative UK payments industry must consider the opportunity to invest in ISO 20022 – making it the default future choice.
The UK payments industry has a long history of being committed to common industry standards and this commitment will continue.
Where does Payments UK come in?
Collaboration is the key to success in the development of payment systems. Over a number of years, under the guise of Payment UK’s predecessors, the team involved in this project has made a largely invisible but important contribution to maximise the benefits of ISO 20022.
This year we brought together 40 high-profile financial organisations from around the world to our offices to facilitate coordination around real-time payments. At the meeting, those gathered agreed the next steps towards drafting technical documentation and message information guides needed to advance harmonisation of market practices and standards.
What is happening next?
Payments UK has a role and remit to represent the growing payments industry.The new association represents the views of its members, providing payments knowledge, expertise and thought-leadership.
We will continue to build on the industry’s long-standing record of collaboration on projects like ISO 20022, building on the expertise developed through delivering major projects such as Paym and the Current Account Switch Service to benefit customers.
Where can I get more info?
To learn more about ISO 20022, have a look at its website: