In just a few hours, the payment industry is set to be transformed with the launch of ISO 20022 on March 20, 2023. The launch of this new payment processing system will revolutionize the way we make and receive payments, with faster, more efficient and secure transactions that will benefit both consumers and businesses alike.
ISO 20022 is a new global messaging standard for electronic data interchange between financial institutions. It will provide a common language for payments, enabling faster and more efficient communication between banks and other financial institutions around the world. This new messaging standard is set to replace the existing payment messaging systems, including SWIFT, which is currently used by banks to transfer funds.
The adoption of ISO 20022 will bring numerous benefits to the payment industry, including faster payment processing times, greater efficiency, and lower costs. It will also enable banks to offer more advanced payment services to their customers, including real-time payments, which will significantly reduce the time it takes for funds to be transferred between accounts.
One of the key beneficiaries of ISO 20022 will be the Federal Reserve’s new instant payment system, FEDNow. FEDNow is a real-time gross settlement service that will enable banks to instantly transfer funds between accounts, 24 hours a day, 7 days a week. The launch of ISO 20022 will make it possible for FEDNow to process payments faster and more efficiently, which will benefit both consumers and businesses.
In addition to the launch of ISO 20022, the payment industry is also set to undergo significant banking updates with the RTGS Renewal Programme. The RTGS Renewal Programme is a project being undertaken by the Bank of England to update the UK’s Real Time Gross Settlement (RTGS) system, which is used to settle high-value payments between banks.
The update to the RTGS system is also set to be launched in March 2023, and will provide banks with a more modern, resilient and secure payment processing system. The new system will be based on ISO 20022, enabling faster and more efficient payment processing, and will also include enhanced security features to protect against fraud and cyber attacks.
Despite the many benefits of ISO 20022, some banks may not be ready to adopt the new messaging standard by the March 20, 2023 launch date. This could lead to some banks experiencing payment processing delays or difficulties, which could result in reputational damage and loss of business.
However, the benefits of ISO 20022 are too significant to ignore, and banks that fail to adopt the new messaging standard risk being left behind in the highly competitive payment industry. As such, it is likely that all major banks will adopt ISO 20022 in the near future, ensuring that they are able to offer their customers the most advanced payment services available.
In conclusion, the launch of ISO 20022 on March 20, 2023, is set to revolutionize the payment industry, bringing faster, more efficient and secure payment processing to consumers and businesses around the world. The adoption of ISO 20022 will enable banks to offer more advanced payment services, and will benefit the Federal Reserve’s new instant payment system, FEDNow.
While some banks may not be ready to adopt the new messaging standard, the benefits of ISO 20022 are too significant to ignore, and it is likely that all major banks will eventually adopt the new system. With the launch of ISO 20022, the payment industry is set to enter a new era of faster, more efficient and secure payment processing that will benefit us all.
