A new messaging standard for UK payments: ISO 20022

Using data to increase harmonisation, innovation and resilience

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 the Bank’s sterling high value payment system CHAPS.

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.

Read our fact sheet on ISO 20022 for more background Opens in a new window Opens in a new window Opens in a new window Opens in a new window Opens in a new window Opens in a new window Opens in a new window and see 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.

Who we are engaging with and why

Financial institutions

Financial institutions are core users of the high value payment system.

Corporates

Corporates use high value payments for buying supplies and paying tax.

Payment industry technology providers

ISO 20022 will need changes to be implemented in payment systems.

Trade bodies and industry groups

The members of many trade bodies and interest groups will be affected by the changes.

Solicitors and conveyancers

Solicitors and conveyancers use high value payments for property transactions.

Our timelines and approach for CHAPS

The RTGS Renewal Programme has consulted with CHAPS Direct Participants, other central banks and members of the payments industry on its plans for ISO 20022 migration, we continue to work closely with stakeholders as we develop this detail further.

Following industry wide consultation and an impact assessment, the Programme is now able to confirm a revised approach to ISO 20022 migration: 

Phase 1: Preparation (Completed)

Phase 2: Like-for-like

  • From June 2022 the Bank will require all CHAPS Direct Participants to send and receive ISO 20022 payment messages (pac.008, pacs.009 (/COV) and pacs.004).
  • ISO 20022 messages will be mapped from MT messages on a like-for-like basis using only the like-for-like XML schemas. Enhanced data will not be permitted.

Phase 2.1:

  • From February 2023 the Bank will require all CHAPS Direct Participants to receive enhanced ISO 20022 payment messages and at a minimum continue to send like-for-like messages, using the enhanced XML schemas.
  • CHAPS Direct Participants will be able to send enhanced messages, but will not be mandated to do so.
  • The like-for-like schemas and rules will be forward compatible with the enhanced schemas and the like-for-like schemas will be decommissioned at this point.

Phase 3:

  • The Bank will introduce the new RTGS2 core ledger and settlement engine in September 2023.
  • At this point, CHAPS Direct Participants must continue to be able to receive enhanced messages, as under Phase 2.1.

Phase 4:

  • The Bank 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, above).
  • From spring 2024, the Bank will mandate the use of Purpose Codes and LEIs for payments between financial institutions. It will also mandate Purpose Codes for property transactions. From November 2025 the Bank will mandate the use of Structured Addresses and Remittance Data for all payments.

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 12 February 2021

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