ISO 20022

ISO 20022: an international standard that describes how financial messages are structured. These are payment orders that banks send to each other, credit notifications, statements and payment statuses. The messages are written in XML, and each field has its own tag and a strict format.

How it differs from older formats

Interbank transfers used to be sent as MT messages, for example MT103. They have little room and a lot of free text: the beneficiary’s address and the payment purpose were often written on a single line. In ISO 20022, the data is split into fields. The beneficiary’s name, street, city and country, the purpose code and the document references each go separately. It is easier for a bank to check the payment automatically, and the data passes along the chain without being cut off.

Where it is used

• SWIFT has moved cross-border payments to ISO 20022 messages.
• The European SEPA scheme and the Chinese CIPS system are built on the standard.
• Many central banks, including the Bank of Russia, use ISO 20022-based formats in their national payment systems.

What it means for a company

• The beneficiary’s address is needed in full and broken down into parts: street, city, country. An incomplete address on the invoice triggers a query from the bank.
• The payment purpose is read more closely. It is better to give the contract and invoice references exactly, without abbreviations.
• All banks in the chain see the same data, so discrepancies with the documents are detected faster.

When a payment goes through an agent from our pool, we check the beneficiary details against the contract and the invoice before the payment order is issued. This reduces the chance that an intermediary bank will stop the transfer because of incomplete data. More on how we select a route: Route selection.