Payments messaging firm SWIFT has released its first set of guidelines for financial institutions using the ISO 20022 payments messaging standard to complete cross-border transactions.
A press release issued Wednesday (July 31) said ISO 20022 has the potential to promote efficiency in the correspondent banking community and modernize cross-border transactions. The guidelines were developed by the Cross-Border Payments and Reporting Plus (CBPR+) working group, SWIFT explained, a working group overseen by the Payments Market Practice Group (PMPG).
MyStandards now offers the first four Payments Clearing and Settlement Usage Guidelines to promote consistency in how data is exchanged between financial institutions (FIs) in cross-border payments. The first guidelines apply to FI to FI Customer Credit Transfer, FI to FI Institution Credit Transfer, FI to FI Payment Status Report, and Payment Return.
Looking ahead, the CBPR+ group plans to release guidelines on ISO 20022 that align with the High Value Payment System (HVPS+) to enable interoperability with high-value domestic payment processing, said SWIFT.
More guidelines will be released in the future, the company added.
“Adoption of ISO 20022 will continue the transformation of correspondent banking already ongoing,” SWIFT said in its announcement. “International payments often contain unstructured and ambiguous transaction data, causing unnecessary delays and failed processing. ISO 20022 will modernize international and domestic payment rails, enabling right and new payment services.”
SWIFT pointed to the potential benefits of the ISO 20022 payments messaging standard for corporate payments in particular.
“It will allow for rich invoice and tax information, originator and beneficiary details, and necessary regulatory information for beneficiary jurisdictions,” it said.
Widespread adoption of these standards will also allow for streamlined reconciliation and cash management transparency for beneficiaries, it added.
Earlier this year SWIFT announced the formation of a working group to develop guidelines and standard strategies to implement the ISO 20022 standard for cross-border transactions. At the time the company said FIs’ shift of cross-border transactions to the standard will begin in November of 20201.