ISO 20022’s Next Phase Stalled by Corporate Data Gaps

The payments industry has largely converted its cross-border messaging infrastructure to ISO 20022. Its next challenge is getting structured address data to match the new messaging standard.

Swift postponed the next major milestone in that effort Thursday (Aug. 27), extending the timetable for eliminating fully unstructured postal addresses from ISO 20022 payment messages after large parts of the industry across all regions said they couldn’t meet the November requirement.

Swift deferred all payments changes scheduled for Standards Release 2026 and hasn’t set a replacement date for the structured address requirement. There’s a plan in place to consult banks, central banks, payment infrastructures, market practice groups and corporates. Swift will provide an update by December.

The postponement came after the industry’s underlying migration to ISO 20022 was largely completed. Swift said in its Thursday announcement that more than 98% of payment instructions are now sent in ISO 20022 following the end of coexistence with the older MT standard last year.

What remains unfinished is part of the reason the industry made that transition in the first place: turning payment messages into richer, standardized and machine-readable data that can support greater automation, more effective compliance screening and better straight-through processing.

Postal addresses are now showing how difficult that can be.

Swift’s latest readiness data, released in August, showed that unstructured addresses still dominate Cross-Border Payments and Reporting Plus (CBPR+) payment traffic. In July, 58.3% of debtor addresses and 59.3% of creditor addresses were unstructured, compared with 36.9% and 27%, respectively, that were structured or hybrid.

The goal is to make information immediately usable by machines rather than requiring systems or people farther along the payment chain to interpret free-form text.

The Data Problem Starts Upstream

Swift’s guidance for corporate customers said businesses must source creditor address information through their own channels, store it in their ERP or treasury applications, and provide it to their bank when the payment is initiated.

That puts ERP platforms, treasury management systems and bank payment channels in the middle of the next phase of ISO 20022 implementation.

A supplier address stored as a line of free-form text may work for an invoice or a human reviewing a vendor record. It doesn’t automatically give a payment system discrete town and country fields that can be transmitted through an ISO 20022 message.

The Federal Reserve’s response to the Swift delay reinforces that the work isn’t limited to cross-border messaging. Federal Reserve Financial Services on Thursday moved its planned November 2026 release of the Fedwire Funds Service to November 2027 following Swift’s announcement.

Fedwire has already migrated to ISO 20022. The Fed said it will announce the final scope of the November 2027 release this fall, while its current implementation guidance tells financial institutions to continue preparing for removal of unstructured postal addresses and to involve their software vendors or processors.

Corporate customers are getting similar instructions.

U.S. Bank said Friday (Aug. 28) that it and payment networks won’t begin rejecting wires for address formatting in November. Instead, the bank encouraged customers to continue updating systems, files, templates, repeat codes and processes, and to start collecting and providing addresses when wires are initiated. It also directed ERP users to their software vendors for information about supporting the requirements.

The implications extend beyond wire message formatting as payments become embedded in the applications holding the underlying business data.

PYMNTS Intelligence has tracked the expansion of payments inside ERP platforms, where transactions can increasingly be initiated and settled without leaving the systems used to manage invoices, suppliers and financial records.

Embedding payment execution there increases the value of automation, but it also increases dependence on the quality of the data already sitting inside those systems. A payment workflow can be automated while the beneficiary information feeding it remains inconsistent or incomplete.

The PYMNTS Intelligence report “The Real-Time Perception Gap: How Experience Is Driving the Next Phase of Instant Payments Adoption,” a collaboration with The Clearing House, found in June that integration with ERP, treasury management and accounting systems is the leading barrier businesses identify to real-time payment adoption. Better integration is the most important payment performance improvement for 22% of businesses overall and 29% of businesses generating more than $25 million annually.

Swift’s postponement provides a measure of how much work remains.

For all PYMNTS digital transformation coverage, subscribe to the daily Digital Transformation Newsletter.