ISO 20022 defines a common language for financial information that is increasingly being adopted across the globe. According to Swift, over 5,700 financial institutions in over 200 countries are already sending or receiving ISO 20022 messages, accounting for 23% of cross-border Swift payment traffic. These figures are expected to increase dramatically by the end of 2025.
But this common language for payments is constantly evolving. It can adapt to new technologies, changing regulatory requirements, and new business needs to support innovation. There are also differences between ISO 20022 implementations running in different Financial Market Infrastructures (FMIs) around the world, caused by factors such as variation in message versions, local market practice, and release cycles.
Because it is an open and flexible standard, individual FMIs can implement ISO 20022 in a way that works best for them, their local market conditions and requirements, and their participants. However, this flexibility also creates a risk of variation, incompatibility between jurisdictions, friction, and reduced interoperability.
Countless articles have been published explaining and promoting the benefits of ISO 20022, including automation, straight-through processing (STP), and the use of rich data. A fragmented, divergent evolution will exacerbate friction between markets and make these benefits more difficult to realise.
Even the much simpler predecessor to ISO 20022, the Swift MT format, used for high-value payment traffic, constantly evolved to meet the needs of financial institutions and their customers. At the same time, annual releases of updated MT standards have been a familiar part of the Swift landscape for decades. Therefore, the ISO 20022 standard will also continue to evolve to remain fit for purpose.
Interoperability is the key to enabling this evolution to occur without introducing new fragmentation of standards, friction, and incompatibility. The FMIs that achieve it will reduce costs and processing times for their participants. But how can this be attained?
Before addressing this question, it is necessary to highlight some key stakeholders in the global ISO 20022 standards jigsaw puzzle.
Cross-border Payments and Reporting Plus (CBPR+) is a workgroup of payments experts whose mission is to create ISO 20022 Market Practice and Implementation Guidelines for cross-border payments, ensuring a common roll-out and implementation by banks. CBPR+ Message Usage Guidelines (ISO 20022 specifications) define how ISO 20022 messages are to be used and validated for cross-border payments and cash reporting on the Swift network.
The Committee on Payments and Market Infrastructures (CPMI) is an international standard setter that promotes, monitors, and makes recommendations about the safety and efficiency of payments, clearings, settlements, and related arrangements, thereby supporting financial stability and the wider economy. CPMI also serves as a forum for central bank cooperation in related oversight, policy, and operational matters, including the provision of central bank services.
CPMI is running a cross-border programme, endorsed by the G20 leaders, with the goals of improving access, speed, and transparency of cross-border payments, as well as reducing the cost of these transactions. CPMI has published a data model to promote consistency in cross-border payments.
High Value Payments Plus (HVPS+) is a self-governed and autonomous group, comprised of representatives of FMIs worldwide. Its mission is to drive better market practices and the correct use of standards to achieve full STP and improved customer outcomes. The HVPS+ group maintains a set of HVPS+ Message Usage Guidelines, providing a template for FMIs for their own message collections, promoting interoperability and harmonisation.
In working to reach its goals, HVPS+ developed an ISO 20022 Payments Interoperability Charter, which sets out objectives around information sharing between FMIs, principles around maintaining currency of ISO 20022 versioning (i.e., harmonisation), and interoperability by minimising variation from the template.
Just as cross-group alignment between HVPS+ and CBPR+ is formally included in the change management cycles for those groups, information sharing between FMIs will also be helpful for those individual bodies in planning their own message development activities.
Although it may be infeasible for FMIs to share details of their message specifications while in development, or even when live, it should be possible for them to be transparent about their current message collections (message types and versions), roadmap, or long-term schedule for future changes, as well as any market practice or release notes deemed non-sensitive and sharable.
The following FMIs have already declared their support for the principles and objectives of the Interoperability Charter:
Australian Payments Network (HVCS)
Bank of England (CHAPS)
Cross-Border Payments and Reporting Plus (CBPR+)
Eurosystem (T2)
Federal Reserve Financial Services (Fedwire)
Payments Canada (LYNX)
Payments New Zealand (HVCS)
South African Reserve Bank (SAMOS)
Swiss National Bank & SIX Interbank Clearing (SIC)
The Clearing House (CHIPS).
More FMIs are expected to follow, and HVPS+ is actively promoting and encouraging new memberships and new declarations of support for the Charter. Significantly, CBPR+ has endorsed the Charter, encouraging FMIs to provide their respective support.
Global adoption of the HVPS+ ISO 20022 Payments Interoperability Charter is an important step for FMIs, as it can help remove the friction and promote harmonisation, as well as leverage the benefits and significant opportunities of the ISO 20022 messaging format.
Consistent ISO 20022 adoption across jurisdictions will address friction in cross-border payments, in addition to facilitating greater efficiency and innovation in payments. More information on HVPS+ and a link to the ISO 20022 Payments Interoperability Charter are available here.
HVPS+ has also published a maintenance process, aligned to the equivalent CBPR+ process. This includes cross-group alignment steps, where CBPR+ and HVPS+ share change requests in their respective pipelines to ensure they do not evolve in different directions.
The first real test of these processes is happening now and in the coming months, and these processes will be refined for repeated use in future years. It is an encouraging start to the harmonisation and interoperability journey.
While these activities are underway, FMIs will need to work with their participants to ensure awareness and preparedness for upcoming changes, to educate and support them through these changes, and to provide active coordination.
Since we began our period of coexistence of ISO 20022 and MT format processing in the Australian High Value Clearing System (HVCS) in March 2023, we have continued to collaborate with industry stakeholders to define and document best practices for utilising the structured data, newly available in the ISO 20022 format. This included using:
legal entity identifiers (LEIs)
structured remittance information
payment purpose codes
structured postal addresses.
While these new capabilities are currently optional, widespread adoption of such structured data is anticipated in the longer term.
Over the past year, we have enhanced our guidance on using ISO 20022 in HVCS, refining market practice. Looking ahead to 2025, we are committed to updating the HVCS versions of ISO 20022 to align with evolving standards and the specifications used in other markets and cross-border payments. Doing so will also ensure our compliance with the now well-publicised CPMI Data Model.
This ongoing maintenance is crucial to improve and maintain interoperability, increase STP rates, reduce cost and time, mitigate errors in payment processing, and foster new opportunities for innovation within the industry.
Embracing ISO 20022 is not just a tactical compliance obligation: it should be seen as a strategic opportunity for the future innovation and growth of the payments industry.
Rob has been the Program Director of the Australian ISO 20022 Industry Migration Program since it began early in 2020, when the Australian Payments Network (AusPayNet) was appointed as the central coordination authority for the Program. Previously Head of Project Delivery, Rob has been running payments industry projects for AusPayNet for the last 19 years. These have ranged in topic, from high and low value clearing systems, to cards and communication networks. He has over 35 years’ finance industry experience, incorporating roles at the Australian Securities Exchange and the Bank of New York in London. Rob is also the Co-Chair of the High Value Payment Plus (HVPS+) group. HVPS+ is comprised of Market Infrastructures from around the world, with a mission to drive best practice and correct use of payment messaging standards, to achieve interoperability across high value payments systems.
AusPayNet is the Australian payments industry self-regulatory body, making payments thrive by driving collaboration between its network of over 150 members to deliver improvements that benefit all Australians.
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