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Demystifying ISO 20022: Evaluating the benefits and limitations of new messaging standards

Author

Listed:
  • Gallaher, Mike

    (Fellow, Visa Economic Empowerment Institute, Germany)

  • Harper, Chad

    (Senior Fellow, Visa Economic Empowerment Institute, USA)

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.

Suggested Citation

  • Gallaher, Mike & Harper, Chad, 2021. "Demystifying ISO 20022: Evaluating the benefits and limitations of new messaging standards," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 15(4), pages 410-418, December.
    • Handle: RePEc:aza:jpss00:y:2021:v:15:i:4:p:410-418
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    More about this item

    Keywords

    messaging standards; ISO 20022; history; faster payments; retail payments; cross-border payments; SEPA;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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