Ready for migration to ISO 20022
Payment systems handling high-value transactions (or LVPS – Large Value Payment Systems) are moving from the legacy FIN standard to the ISO20022 standard messaging. This change is taking place at a global level, affecting payment infrastructures all around the world.
In Europe, both TARGET2 and EURO1 payments systems are scheduled to migrate in November 2021. This transition to a standardized format allows payments to carry significantly more structured data and introduces standardization across previously different types of payments. The change is set to improve both efficiency and STP levels. It is a major step on the journey to modernizing payments.
The XML-based MX messages have the potential to simplify payment processing and reporting, reducing costs, while their structured format makes automated compliance analytics possible. Reconciliations, a major industry pain point, will also be improved. Ultimately, MX messages will provide the foundation for new services and new usage of the payments data.
This is a significant and far-reaching change that impacts the entire payment environment worldwide and will be rolled out across different geographies in different stages.
Time to act
Banking systems need to be ready to handle the new, rich MX messages, which contain significantly more data than legacy formats. It will allow greater efficiency, openness and interoperability across payments systems, and ultimately will provide a better customer service.
Are you ready for the new ISO 20022 era?
SWIFT gpi add-on
SWIFT gpi is another major enhancement to the world of payments, making cross-border payments faster, more transparent and trackable.
SWIFT notes that with 50% of gpi payments credited to end beneficiaries within 30 minutes and almost 100% within 24 hours, gpi will make cash flow management, budgeting and investing much easier for corporations. The gpi standard also means payment flows can be tracked end to end, in real time, providing maximum visibility into ongoing transactions. It also enables banks to provide customers will full visibility into fees, costs and processing times, making for more accurate financial management. Remittance data is also guaranteed, for easier reconciliation against invoices.