A group of central banks and payments industry bodies has launched an “interoperability charter” to co-ordinate the ongoing development of the ISO 20022 messaging standard.
ISO 20022 was adopted a year ago as the messaging standard for Australia’s High Value Clearing System. The payments handled by the HVCS are usually between financial institutions. Payments are settled using the Reserve Bank Informational and Transfer System (RITS) and participants hold exchange settlement accounts within RITS to manage settlements. HVCS has 50 participants.
The move to ISO 20022 allows payment messages to carry more data, with the aim of improving process automation, interoperability and corporate customer experience.
Now a group called High Value Payments Plus, of which the Australian Payments Network is a member, has released a charter that sets out an agreed set of objectives and principles to ensure that as the system develops it will maintain interoperability across jurisdictions.
HVPS+ said in a statement: “While ISO 20022 provides a common language for payments, it is constantly evolving. It can adapt to new technologies, support innovation adapts the changing regulatory requirements and to new business needs. There are also differences between ISO 20022 implementations running in different market infrastructures, caused by factors such as variation in message versions being used, market practice and in release cycles.
“The ISO 20022 Payments Interoperability Charter aims to foster support from markets infrastructures to an agreed set of objectives and principles designed to enable evolution and interoperability. Interoperability means minimising friction in the movement of payments across borders and domestically.”
A year after the introduction of ISO 20022 in Australia, 50 per cent of the volume and 40 per cent of the value of HVCS payments are being made using ISO 20022 messaging. Thirty-one of the 50 HVCS participants are using the format for some or all of their high value payments.
AusPayNet’s ISO 20022 industry migration program director, Rob Magee, said some participants are yet to implement full functionality but he expects this to be done between May and September.
Benefits of the messaging standard are said to be more structured remittance information and identification of parties in the payments chain, aiding know your customer, anti-money laundering and counter-terrorism financing efforts, and sanctions screening.