Standards Bodies Converge on Core Payments Kernel

The core payment kernel consists of an agreed set of key financial data components required for a payment message in any currency. The payment kernel can be processed by any bank irrespective of location and can be issued by any corporation irrespective of business line. Two factors have been key to the success of the project. Firstly, all parties agreed to use the latest ISO standard (UNIFI – ISO 20022) for the definition of the core payment kernel message models and XML schemas. Secondly, all have committed to including it in their own existing sets of standards. The collaboration began in the summer of 2003, when nine major international banks and four standards initiatives created a single international standards harmonisation effort to avoid divergence and duplication of standards. The four standards bodies - IFX, OAGi, SWIFT and TWIST - signed a MoU in November to develop a common standardised ‘core payment kernel’ containing all financial information related to the execution of a corporate payment by the banks. Using the SWIFT message models already adopted by RosettaNet for corporate-to-bank payments as a basis, together with messages developed by the other organisations involved, the IST Harmonisation Team agreed on the core components needed. In March 2004, the core payment kernel was endorsed by a ‘global business validation group’ sponsored by SWIFT. The group consisted of banking community representatives worldwide, experts from the corporate communities of IFX, OAGi, RosettaNet, SWIFT and TWIST, and representatives of other standards bodies such as UN/CEFACT. The IST Harmonisation Team is now publishing its Final Recommendations in a report describing the UNIFI compliant messages and giving several recommendations on how to best use them. The report also details how to extend the messages with additional information from existing standards, such as remittance information, and how to maintain them using the ISO 20022 maintenance process. Banks, corporates and vendors can now start using the core payment kernel to streamline payment applications and take advantage of the STP benefits. RosettaNet is already implementing the messages. The initial focus on payments initiation and status messages provides a solid framework for the future collaboration which will cover bank-to-corporate advices and statements. Preparation work is now underway for this second phase. The nine banks involved: ABN AMRO, Bank of America, Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, Nordea, Standard Chartered and Wells Fargo.