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Table of contents

What are the benefits of ISO 20022 and how does it differ from MT?

When exchanging financial information, including via MT messages, specialists in different domains or countries have developed their own jargon and can use different words to refer to the same concept. The ISO 20022 standard can help to overcome barriers linked to the use of these different syntaxes and semantics. It is a global, open standard that describes a modelling methodology to capture – in a syntax independent way – financial business areas, business transactions and associated message flows.

The ISO 20022 methodology starts with the definition of the business model that is a central dictionary of commonly agreed business items used in financial communications. The second layer builds on the first by defining logical messages using the previously defined business concepts. Within these, individual elements, such as ‘InterbankSettlementAmount’ and ‘InterbankSettlementDate’ can be reused. Finally, the syntax (physical representation) of the logical message will be specified.

Thanks to its structured and richer data elements, ISO 20022 enables counterparties, intermediaries, and beneficiaries to increase automation in transaction processing, reducing costly manual interventions, and improving visibility on cash flows and cash positions, for example, in payment transactions. It provides banks with better insight into the business purpose of a financial transaction, enabling the provision of improved value-added services.

Businesses, as payment users, can gain more insight from their payments data into the behaviours and choices of their own customers. And, more complete and accurate party data leads to more effective and efficient screening, compliance and anti-money laundering (AML) processes. Lastly, payments scenarios such as ‘Payment on Behalf of’ (POBO) can be fully supported, avoiding complex workarounds.

How does ISO 20022 organise financial message definitions?

ISO 20022 organises financial message definitions according to business domains that are well-recognised functional domains in the industry. The ISO 20022 catalogue includes over 2,300 messages, covering payments, securities, foreign exchange, cards and trade services. These business areas are uniquely identified by four-character codes called ‘business area codes’.

For payments, ISO 20022 messages are available for the complete end-to-end payments chain: customer payment, interbank clearing and settlement or cash management. ISO 20022 messages are also available for supporting exceptions and investigations, status reports, and remittance advice, as well as direct debit mandate management.

Which business domains are adopting ISO 20022?

ISO 20022 is a standards development methodology used by multiple business domains. These include payments clearing and settlement, payment initiation, cash management, securities trades and settlement, account management and trade services management.

The SWIFT community has approved the adoption of ISO 20022 for cross-border payments and reporting (CBPR+) messages, starting November 2022, for general availability, and three months earlier – on an opt-in basis. This is the focus of the ISO 20022 programme, encompassing standards market practices, translation rules and services, and customer and vendors’ awareness campaigns. The aim is to ensure financial institutions can send ISO 20022 messages from November 2022, whatever the format preference of the other banks in the payment chain.   

Payment market infrastructures, including major reserve currencies such as EUR, USD, GBP, SGD, and AUD, are also adopting ISO 20022, and are committed to go-live by the end of 2023. SWIFT encourages and supports the adoption of ISO 20022 (HVPS+) by instant and real-time gross settlement systems to align with the richer format of cross-border payments.

We are also helping to enable other market initiatives, including the SRDII and CSDR European regulatory requirements, to complement ISO 15022-based messages in securities.

Other business domains will continue to use existing standards (FIN/MTs), including corporate to bank, securities, trade, forex and market infrastructures.

What is CBPR+?

Cross-border Payments and Reporting Plus (CBPR+) is the usage guidelines that define how ISO 20022 will be used for correspondent banking on the SWIFT network. The CBPR+ working group has created a collection of usage guidelines, covering payment, clearing and settlement (pacs) and cash management (camt) messages. Translation rules have also been created for selected messages in this collection, related to the equivalent SWIFT MT Category 1, 2 and 9 sets of messages.

The usage guidelines are publicly available on MyStandards and include downloadable XML Schema, PDF and Excel specifications. The MT <> CBPR+ translation rules and logic are available on the CBPR+ translation portal.

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What is HVPS+?

High-Value Payments Plus (HVPS+) is a usage guideline template which originated as part of the ISO 20022 harmonisation initiative. It defines how ISO 20022 should be used for high-value payments market infrastructures. This group has specified usage guidelines that market infrastructures should use with their participants.  

The HVPS+ usage guidelines are publicly available on MyStandards, and cover payment, clearing and settlement (pacs) and cash management (camt) messages.

To ensure consistent usage and interoperability, ISO 20022 guidelines for HVPS+ and CBPR+ are fully aligned, allowing for minor business differences such as settlement method.

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When will MT messages for cross-border payments and reporting be decommissioned?

MT messages supporting cross-border payments and reporting transactions will be decommissioned in November 2025. The three-year coexistence period, starting from November 2022, will be facilitated by the In-flow Translation service, a central translation service providing interoperability between the ISO 20022 and MT formats.

What will the release management cycle be for CBPR+?

Once the CBPR+ messages are exchanged in the live service (as of August 2022, on an opt-in basis), the release management cycle for the CBPR+ messages will follow the yearly standards release process – as on the FIN service for MT messages. The deadline to submit change requests for CBPR+ messages (either at the usage guideline level or base message level) will remain 1 June, each year, with implementation on the SWIFT network and FINplus taking place on the third weekend of November the following year. Change requests will need to be approved by the Standards working group and the ISO 20022 Payment SEG, as per the known timeline. The documented process is available in the Knowledge Centre.