Payment systems migration to the ISO 20022 electronic messaging standard

Ivan Radanovic
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Ivan Radanovic: National Bank of Serbia

Working Papers Bulletin from National Bank of Serbia

Abstract: The paper aims to analyse the projects of payment systems migration from the current ISO 15022 to the new ISO 20022 standard globally and in Serbia. One of the main project objectives is to facilitate cross-border payments, still largely characterised by high costs, low speed and insufficient transparency. This objective has been acknowledged globally as testified by the G20 roadmap designed in October 2020. National central banks are implementing their own migration projects based on keeping up with good practices and operating in accordance with the most up-to-date standards. The National Bank of Serbia also aims to achieve the compatibility required for potential connection with other payment systems (e.g. TARGET services of the European Central Bank) and connection to the SEPA geographical scope. New electronic messages are up to three times larger and structured in a way to offer greater flexibility, accommodation to economic conjuncture and complex requirements of AML/CFT, KYC, fraud prevention regulations, and the possibility for an almost one hundred percent straight-through processing rate. The analysis combines descriptive, comparative and case study methods to present in detail the characteristics of payments systems as the fundamental public infrastructure, payment trends, as well as the phenomenon of the electronic messaging standard and the XML pattern as the syntactic basis of the ISO 20022 standard. The paper also looks into the experiences of international payment systems and their operators, migration methods in the SWIFT network, as well as the work of the SWIFT central service for translation of ?? and ?? messages. Potential characteristics of the future software platform of the National Bank of Serbia for the NBS RTGS and NBS Clearing payment systems are also discussed in the paper. Payment systems migration will be completed in November 2025. As for the SWIFT network, the coexistence period started in March 2023 when messaging was possible under both standards. The NBS, as the operator of the payment systems which will switch to the new messaging format, will enable the coexistence of two messaging formats until the end of 2024 as one of the measures for ensuring the continuity of their work.

Keywords: migration; ISO 20022 standard; electronic messages (search for similar items in EconPapers)
JEL-codes: F30 F33 G20 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2024-03
New Economics Papers: this item is included in nep-pay and nep-ppm
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