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Demystifying ISO 20022: Evaluating the benefits and limitations of new messaging standards
Journal of Payments Strategy & Systems,
15
(4),
410-418
(2021)
Abstract
Messaging standards are core to the payment system, enabling institutions across sectors to connect and transact efficiently and effectively. Recent payment infrastructure modernisation efforts have identified one such standard, ISO 20022, as particularly effective at enabling richer data collection, which in turn has the potential to increase payment system interoperability and efficiency. The adoption of a new messaging standard has broad implications for both domestic and cross-border payment systems, with applications not only for faster payment systems but for retail payments more broadly. However, while the benefits for financial services will be net positive, benefits will be limited for domains already using international standards (ie retail card payments). This paper explores the benefits and limitations of ISO 20022, examining recent private sector initiatives and their experiences with implementation.
Keywords: messaging standards; ISO 20022; history; faster payments; retail payments; cross-border payments; SEPA
The full article is available to subscribers to the journal.
Author's Biography
Mike Gallaher is a fellow at the Visa Economic Empowerment Institute. He has considerable experience in financial services and technology policy, having previously worked as a researcher at several nonprofit organisations, government agencies and think tanks, including the Brookings Institution. He holds a master’s in public policy from the University of Maryland and a BA in political science from the University of California, Berkeley.
Chad Harper is Senior Fellow at the Visa Economic Empowerment Institute. He previously spent nearly 20 years at the Federal Reserve Banks of San Francisco, Chicago and Richmond — a decade of which was spent at the Federal Reserve’s Cash Product Office, where he oversaw business planning, finance and operations.
