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

Mike Gallaher and Chad Harper
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Mike Gallaher: Fellow, Visa Economic Empowerment Institute, Germany
Chad Harper: Senior Fellow, Visa Economic Empowerment Institute, USA

Journal of Payments Strategy & Systems, 2021, vol. 15, issue 4, 410-418

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.

Keywords: messaging standards; ISO 20022; history; faster payments; retail payments; cross-border payments; SEPA (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jpss00:y:2021:v:15:i:4:p:410-418

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