August 27th, 2021

ISO 20022 standard – a new payment language


The ISO 20022 payment messaging standard is widely considered an essential component to revolutionizing the global payments infrastructure. In 2018, we previously wrote about how Canada was changing their payments landscape with ISO 20022. At that time, there were about thirty countries that were implementing the new payment messaging standard around the world. In this article, we take a look to see where it has progressed to over the last three years. How it will help the payments industry, the value it will bring, who will benefit from it and what the current roadmap for the ISO 20022 standard looks like.

ISO 20022 standard – a new payment language

As we mentioned earlier, about 30 countries had started the process of adopting the new payment language in 2018 to standardize their domestic and cross-border payments infrastructure. This number now currently stands at over 70 countries around the world. Including – United States, Canada, Australia, Singapore, Hong Kong, United Kingdom, Japan and the Eurozone to name a few. All of these regions have been working hard to replace archaic domestic or legacy payment systems.

The idea being to make all payments, particularly cross-border payments, much easier and quicker from one account to another. Achieving this goal with the added benefit of having richer payment data included required one unified payments system, that is where the ISO 20022 standard comes in. The messages are available for the complete end-to-end payments chain: customer to bank (payment), bank to bank (payment clearing and settlement) and reporting (cash management). A common payment language that increases efficiency and benefits the global financial community as a whole.

How ISO 20022 will help payments

The current messaging that is being used for cross-border payments is ‘MT’, which stands for ‘message, text’. As with ISO 20022, this was developed on the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network. The MT format is usually followed by three numbers (MTXXX) and there are nine MT SWIFT categories (MT1XX, MT2XX…) for different financial processes. Most people will be familiar with the MT940 file used for sending and receiving end-of-day bank account statements.

Making cross-border payments faster and easier are the overriding benefits of moving to ISO 20022. But there are also other key benefits of having a unified payments language. The inclusion of quality payment data in each transaction helps organizations such as banks for example, to rectify a lot of existing challenges they have around payments. Including – higher automation, quicker straight-through-processing, better reconciliations, and improved monitoring of fraud and criminal activity. This will help payments across the world, and is predicted to be used in over 80% of settlement/clearing of all payments by the year 2025.

Beneficiaries from unified payments language  

As we mentioned above banks are one of the main beneficiaries from ISO 20022 but they are not the only ones that will avail of the massive benefits. Below are some of the financial institutions and other organizations.

Central, Retail, Corporate and SME Banks

The standardization and enhancement of payment messaging that ISO 20022 delivers will allow instances of financial crime to be more apparent. Money Laundering will also be detected at a much earlier stage than usual. Both of these will bring significant cost and time savings to banking institutions. Automation of payments reduces the need for manual intervention by branch staff, thereby increasing performance and profitability.


Businesses can improve cash flows, cash visibility, reporting and cash forecasting. All of these will get better due to faster and easier domestic and cross-border transfers. The adoption of these ISO 20022 standard leads to increased automation of Cash Application, Electronic Payments, and Bank Reconciliation finance functions for business. Some of the key benefits for companies are listed below.

  • Streamline complex financial transactions.
  • Accelerate associated communications.
  • Develop a data-rich ecosystem.
  • Improve financial reporting and compliance.
  • Reduce errors in transaction processing and messaging.
  • Lower both business risks and costs.

ISV’s and Fintech

Independent software vendors, such as Cashbook, will be able to automate these payment messages and banking files that are being used for the ISO 20022 standard. These files will be able to be processed automatically via cash automation software modules. This further enhances the speed at which financial processes can be completed in finance departments around the world. Artificial Intelligence (AI) and Machine Learning (ML) progressions in Fintech are further strengthened when standards such as ISO 20022 are incorporated on a global scale.

Roadmap – key dates for adoption

ISO 20022 was first introduced back in 2018 as we mentioned earlier. There is now a roadmap set out for implementing the ISO 20022 standard worldwide. SWIFT have set up the roadmap for everyone to have moved their processes and systems to the new messaging standard. It is recommended to make the move before November, 2022 but at least by November, 2025. There are some who have moved already and they will reap the benefits of early adoption. The new adoption approach comprises 3 phases:

  • Phase 1, now to November 2022: MT messaging remains the standard for cross-border payments. Financial institutions continue to invest, in training staff for ISO 20022 market practice, and in enabling channels, payment processing and screening systems to support the ISO 20022 dataset.
  • Phase 2, from November 2022 to November 2025: SWIFT transaction management services are introduced, supporting the new dataset for ISO 20022 payments and reporting, and enabling co-existence with financial institutions that choose to stay on MT messaging.
  • Phase 3, November 2025 onwards: MT 1, 2 and 9 series messages are decommissioned for correspondent banking, and all interactions with the SWIFT platform use the new ISO 20022 dataset. Source: SWIFT


At Cashbook, we have been working with ISO 20022 related banking files for years. If you’re worried about how this change will affect your business, and you wish to discuss how Cashbook can automate the process for you. Get in touch with our team on +353 61 338 400 (international) or 630-352-2228 (North America), alternatively you can email More information on the ISO 20022 standard can be found here.

Live chat