A new messaging standard for UK payments: ISO 20022

Using data to increase harmonisation, innovation and resilience

Updated approach and timetable to ISO 20022 migration

In January 2022, we issued an updated approach for the delivery of the revised RTGS service. A brief summary on the impact of the revised timetable, by stakeholder, can be found on the 'Summary of changes to the Bank’s ISO 20022 migration announced January 2022' webpage.

This page and the ISO 20022 Technical Resources page provide an overview of our current and final approach to ISO 20022 migration.

Payments data in the UK is changing

The UK payments industry is moving to ISO 20022, the emerging global standard for payments messaging. This standard creates a common language for payments data across the globe.

This change includes our sterling high value payment system CHAPS, which will migrate to ISO 20022 messaging in April 2023.

Better data in payments promises to deliver significant long-term benefits for the economy. To adapt to the new messaging standard and accompanying data requirements, your organisation might have to make process and technology changes.

Find out about how we are collaborating with Pay.UK on ISO 20022 payment messages.

Benefits of ISO 20022

Flexibility

ISO 20022 can adapt more easily than current messaging standards. So it’s more responsive to changes in the economy, emerging technologies and innovation.

Harmonisation

Over 70 countries have already adopted ISO 20022, so messages will be harmonised with payment systems around the world.

Compliance and regulation

Richer data will make it easier for businesses to detect fraud and help target financial crime.

Resilience

ISO 20022 will be used across many payment systems. This improves resilience by allowing re-routing of messages which reduces the impact of outages on users.

Enriched data

More data can be carried. It enables more detailed and better structured reference information.

Competition and innovation

More flexibility means more competition and innovation in the financial sector. Better data may lead to product innovation.

Straight-through processing

Less need for banks to make manual interventions. Potentially fewer delays for the end customer.

Analytics

Enriched data will improve analytics. More efficient data collection may improve the decision making.

Our timelines and approach for CHAPS

The RTGS Renewal Programme has continued to consult with CHAPS Direct Participants, the payments industry, other central banks and members of the payments industry on its plans for ISO 20022 migration.

In January 2022, we announced an update to the migration approach and timetable of CHAPS to the ISO 20022 messaging format.

Transition State 2 preparation: Pilot Platform (summer 2022) 

  • In summer 2022, we will deliver a pilot platform for CHAPS Direct Participants, to support extended testing of the enhanced ISO 20022 messages prior to implementation in live. Further details of this and the requirements for testing and industry readiness will be released directly to CHAPS Direct Participants in due course.
  • For an interim period between November 2022 and TS3 (spring 2024), the Bank will operate the Euro Liquidity Bridge facility manually. Specifically for funding CHAPS Direct Participant Euro Liquidity Accounts (ELAs) in RTGS1, which mirror monies held in the Bank’s Euro cash collateral account at De Nederlandsche Bank (DNB). Therefore during this interim period, CHAPS Direct Participants will need to first contact Payment Systems & Communications (PSC) before they fund the Bank’s Euro cash collateral account at DNB. This is detailed in our 'Euro Liquidity Bridge – changes for CHAPS Direct Participants ahead of ISO 20022' migration statement. 

Transition State 2.1: CHAPS enhanced ISO 20022 messaging (April 2023)

The migration of the live CHAPS service to ISO 20022 will occur April 2023. At this point:

  • CHAPS will move to the SWIFT InterACT service. All CHAPS Direct Participants will need to be able to receive enhanced ISO 20022 payment messages using only the enhanced XML message schemas. At a minimum, the data sent in CHAPS payments must be like-for-like (compared with the requirements and rules for the existing MT message formats). However, we encourage Direct Participants to send enhanced data (i.e. above that required or supported in existing MT message formats) where possible.
  • CHAPS Direct Participants will be able to choose whether to send/receive non-payment messages (e.g. statements, notifications and liquidity-related messages) in either the existing MT or the new ISO 20022 format between Transition State 2.1 and Transition State 3.
  • Further details on how we will implement requires for enhanced data is found under TS3 section below. The Bank and Pay.UK have published a recommended UK Purpose Code list to be used in CHAPS and future NPA payment schemes. These will be available to use in CHAPS from Transition State 2.

Please note - the ISO 20022 like-for-like phase, previously planned for June 2022, will now not go ahead. CHAPS Direct Participants will be required to continue to send MT messages, as they currently do today, until the Transition State 2.1 cut-over to enhanced ISO messaging in April 2023.

Participants should therefore only use documentation and guidance associated with the enhanced messaging schemas going forwards, not like-for-like schemas. We will discuss with CHAPS Direct Participants changes to the technical guidance documentation supporting the Memorandum of Understanding in respect of truncation risk. We will update the guidance to reflect that between November 2022 and April 2023 participants may be required to compress the key fields from enhanced ISO messages receives via cross-border / correspondent banking into MT messages for transmission via CHAPS.

See our technical resources page for further details on Truncation Risk and non-payment message migration.

Transition State 3: New settlement engine (spring 2024)

  • We will introduce the new RTGS2 core ledger and settlement engine in spring 2024 (+/- 3 months; exact date to be confirmed).
  • At the point of transition, requirements for CHAPS payment messages remain the same as in Transition State 2.1. In other words, CHAPS Direct Participants must continue to be able to receive enhanced messages, and are encouraged to send enhanced content in their messages where possible, but can send like-for-like content.
  • All CHAPS Direct Participants will need to send and receive non-payment messages (e.g. statements, notifications and liquidity-related messages) in the relevant ISO 20022 format.
  • From summer 2024 (previously spring 2024), we will mandate certain elements of enhanced data. In particular, it will mandate the use of Purpose Codes and LEIs for payments between financial institutions (pacs.009 CORE messages and certain pacs.008 messages). It will also mandate Purpose Codes for property transactions. These rules will apply to all UK domestic transactions.

Transition State 4 - the roadmap to 2024 and beyond:

  • We plan to launch a consultation on the scope and timing of Transition State 4 in spring 2022. This will explore additional functionality and services relating to RTGS, including detail of further ISO 20022 applications.
  • From November 2025 we will mandate the use of Structured Addresses and Remittance Data for all CHAPS payments. We will consider further enhancements to ISO 20022 message schemas and the CHAPS rulebook to mandate or incentivise full use of the ISO 20022 messages (see Policy Statement). 
  • From November 2025 we intend to implement a programme of annual upgrades to the CHAPS enhanced messaging schemas. This approach will be supported by introducing a new Change Management Framework for CHAPS ISO 20022 messages. This will provide a transparent and inclusive approach to updating the ISO 20022 CHAPS messages. The approach will allow us to move to the latest versions of ISO 20022 (in coordination with other domestic and global market infrastructures), implement policy (such as structured address), and allow CHAPS Direct Participants to propose and agree changes.

Standards Advisory Panel

The Bank of England and Pay.UK have established a Standards Advisory Panel to provide industry advice on the adoption of new payments standards in the UK.  Please see our Industry Engagement page for further details and past minutes.

How to contact us

For enquires of a technical nature, please see our Technical Resources or contact rtgsreadiness@bankofengland.co.uk.

For all general enquiries, speaker engagements and communication please contact rtgsengagement@bankofengland.co.uk.

This page was last updated 16 March 2022

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