The major UK payments systems (CHAPS, Faster Payments, Bacs) are moving to the global messaging standard for payments, known as ‘ISO 20022’. The coordinated adoption of a single standard across UK payment systems will bring many benefits for payments providers, and for the businesses and households they serve. The design of the standard is consistent with that of many other countries and is a significant step forward in harmonisation, both domestically, and for cross-border payments.
The Bank of England has published the results of its consultation on ISO 20022, together with a press release. There were over 70 responses to the consultation from a diverse range of stakeholders, The responses were largely supportive of the proposals in the consultation paper. In particular, there was broad consensus on:
- introduction of the Common Credit Message (CCM), which aims to harmonise messaging across the UK’s main interbank payment systems.
- support for how the CCM will be introduced for CHAPS payments, including when additional data, such as the use of Legal Entity Identifiers (LEI) for transactions between financial institutions, will become mandatory.
To realise the benefits of ISO 20022, a significant amount of change will need to be effected both across the payments industry and the businesses and individuals sending payments. For technology providers this could mean:
- Financial Institutions and Payment Service Providers require technology changes
- Enriched data creates opportunities for innovation and new product development
- Opportunity for further innovation, such as APIs that can interface with the new message
Certain changes have been made to the proposals, to reflect industry feedback since the consultation was launched; these are explained in our response document and will be reflected as we move to implementation.
Visit the Bank's website for further information about the results of the consultation, the latest timeline for the migration to ISO 20022, and next steps for implementation.