What Does ISO 20022 Mean for Payments?

We’re entering a new era for payments. A better payments experience, greater efficiency across global economies and the ability to unlock the power of enhanced data is just around the corner…

What does ISO 20022 mean for payments?

It’s perhaps shocking to think that the payments industry has been largely operating under the same standard since the 1990s. Since then, we’ve seen the introduction of eCommerce, contactless payments, mobile banking and of course, the increasing interconnection of the global economy. To say the SWIFT MT standard was due an upgrade is an understatement. 

Its replacement, the ISO20022 format, isn’t new. Its phased introduction has been happening for years. In fact, this format is already used by many real-time, low-value, and high-value clearing systems around the world. But its position as the global default is nearing closer, with all major payment schemes expected to adopt the global ISO 20022 payment messaging standard by November 2025. 

So what exactly is it – and why is it expected to “rewrite the future” of the payments industry?

ISO 20022: an emerging global standard

“ISO 20022 is an open global standard for financial information. It provides consistent, rich and structured data that can be used for every kind of financial business transaction.”


The complex payments industry relies on a common language to keep dialogue open, and ISO 20022 is set to become that universal language. 

This transition affects all financial institutions active in cross-border payments as well as market infrastructures and corporates to bank flows, though only the cross-border payments and reporting messages are subject to the CBPR+ programme adoption timelines. The new standard relates to the exchange of electronic messages between financial institutions, covering cards, payments, securities, FX and trade.

Compared with its predecessor SWIFT MT, ISO 20022 will result in the collection of richer, more structured data. ISO 20022 allows around 10 times more data about each payment to be sent. This could include information about the purpose of the payment, the original source and the ultimate beneficiary. More data means a better opportunity to gain the type of analysis that could lead to a deeper understanding of customer behaviour.

This enhanced data will also benefit corporates but improving their reconciliation and cash flow forecasting, as well as allowing them to be more efficient in managing and organising that data.

Who does ISO 20022 apply to?

November 2022 marks the point of migration for some of the top global payment infrastructures to ISO 20022. Most banks, corporates and payments companies use SWIFT MT financial messaging for transactions, which will migrate over to the new system and eventually come to an end in 2025.


Of participating central banks expect to implement ISO 20022 in their jurisdiction within the next three years.

Given the interconnected, globalised state of commerce today, its a necessary but mammoth shift – and one that is being backed by some of the world’s major payment infrastructures, such as the Bank of England’s CHAPS system, Target2, and SWIFT, each of which are migrating their high-value payment systems concurrently.

If you are a corporate, ask your bank or financial service provider what their plans are for transitioning to ISO 20022.

What are the benefits of ISO 20022?

“With ISO 20022, financial institutions can screen more readable content, recognising where data starts and ends to assess payments in context. The impact for financial institutions expands beyond payables and receivables to transaction monitoring, client reporting and many other elements, so planning for migration sooner rather than later is key.”

JP Morgan

Better data in payments promises to deliver significant long-term benefits for the economy as a whole – but also the individuals and corporates involved in transactions. In short, it means greater efficiency, better risk management, and reduced costs.

The highly structured messaging format of ISO 20022 means machines can read messages better. The result? Processing efficiencies thanks to increased straight-through processing, fewer rejections, fewer exceptions, better reconciliations and risk management.

For corporates specifically, this means:

  • More efficient reconciliation
  • Enhanced invoice information
  • Fewer manual processes to reduce DSO (days sales outstanding) and improve working cash flow.
  • A wealth of data that drives better decision-making, giving rise to opportunities to better serve customers as a result. This data will also help firms understand their businesses better, enabling them to operate on a more real-time basis with customers.

The new standard represents just one of the many advances across a range of industries as a result of data-driven innovation. Studies have shown firms with advanced data management capabilities are around five times more likely to make decisions more quickly than their peers.

This transition will represent greater innovation in the long-term, too.

“In the same way the internet grew in ways unimagined at its birth, innovation will likely drive payments into new, exciting avenues. Given the growing importance of Environmental Social and Governance (ESG), could the smart bank of tomorrow offer clients payments information that includes key sustainability information?”


ISO 20022 is an exciting opportunity to harness data across the entire payment ecosystem and deliver a better, more efficient service as a result. 

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