News release
The Bank, working carefully with the payments market, has today effectively moved CHAPS, the UK’s high-value payments system, to ISO 20022 – the latest international monetary messaging requirement. This marks a considerable turning point in the multi-year program to renew the Bank’s Real Time Gross Settlement (RTGS) service: a program whose goals are to increase strength, competitors and development within the payments landscape.
It likewise marks an essential turning point in the international shift of payments to ISO 20022. The ISO 20022 basic permits more information to be sent with payments, and in a more structured format. ISO 20022 is an open global requirement, which has the prospective to develop a single typical language for the majority of payments worldwide and provide a vast array of advantages. In addition to the UK, numerous significant jurisdictions have or are planning to carry out ISO 20022 by November 2025, when SWIFT is scheduled to retire its existing MT message requirement for cross-border payments. Pay.UK’s New Payments Architecture, which will change the UK’s Faster Payments system in due course, will likewise utilize ISO 20022.
ISO 20022 provides a vast array of advantages to private organizations and, through higher international harmonisation, improves cross border payments. The crucial advantages consist of:
Consumers and businesses are not likely to require to alter the method they send out CHAPS or cross-border payments in the meantime. However, they may start to see alternatives to include more details or particular recommendations (such as billing numbers) with CHAPS payments towards completion of this year. We motivate customers and business to call their bank, building society or payment company if they have any questions.
Executive Director of Payments Victoria Cleland said:
“The introduction of the ISO 20022 financial messaging standard marks a major milestone in our mission to enhance our RTGS and CHAPS services: critical infrastructure at the heart of the financial system.
“In an increasingly globalised payments world, harmonisation of messaging through ISO 20022 will enable more systems to speak the same language and ultimately enhance cross border payments. The move to ISO 20022 is a key element in the Bank’s RTGS Renewal Programme and meets one of our commitments to the Financial Stability Board’s Roadmap to Enhance Cross Border Payments.
“ISO 20022 also provides great benefits for individual firms: I would encourage them all to embrace these benefits.
“I am very grateful to the teams in the Bank, to Accenture (our Technology Delivery Partner) and also to our CHAPS Direct Participants and the broader payments industry whose strong collaboration and commitment has made this transformational change possible.”
RTGS Renewal
Today’s statement is a crucial turning point in the Bank’s renewal of RTGS.
Our vision is to establish an RTGS service which supports the payments market of the future by providing crucial advantages such as: increased strength and gain access to, broader interoperability, enhanced user performance and enhanced end-to-end threat management of CHAPS.
The next stage of the Programme, building on core facilities improvements presented today, will be the intro of the brand-new core settlement engine for RTGS due in summer season 2024.
Notes to editors
CHAPS is among the biggest high-value payment systems on the planet and was utilized to settle approximately £395 billion every day in 2015. This consists of wholesale payments made by big organizations in addition to people purchasing pricey products like automobiles or homes.
To help understand the complete advantages of the ISO 20022 messaging requirement, the Bank intends to mandate specific aspects of boosted information within CHAPS from November 2024. Subject to the result of the recent CPMI assessment on propositions for an improved minimum information requirement for cross-border ISO 20022 payments, CHAPS means to adopt this from November 2025.
ISO 20022 changes the previous tradition SWIFT ‘MT’ requirement, which SWIFT is retiring for payments in November 2025.
The FSB Roadmap, commissioned by the G20, sets out a high level strategy of objectives and turning points to attend to enduring difficulties around the high expenses, low speed, restricted gain access to and inadequate openness connected with cross-border payments. Adopting a harmonised ISO 20022 variation for message formats forms among the secret ‘building blocks’ for this roadmap.
Further information on the RTGS Renewal Programme can be discovered here: RTGS Renewal Programme
Further basic details about the RTGS/CHAPS service is available on the Bank’s website consisting of A short intro to the Real-Time Gross Settlement system and CHAPS
ISO Benefits
Improved Flexibility: ISO 20022 can adjust more quickly than present messaging requirements. So it’s more responsive to modifications in the economy, emerging innovations and development.
Global Harmonisation: Over 70 nations have actually already embraced ISO 20022, so messages will be harmonised with payment systems all over the world.
Compliance and policy: Richer information will make it simpler for businesses to find scams and help target monetary criminal offense.
Resilience: ISO 20022 will be utilized throughout numerous payment systems. This enhances strength by enabling re-routing of messages which minimizes the effect of interruptions on users.
Enriched information: More information can be brought. It allows more comprehensive and much better structured recommendation details.
Competition and development: More versatility indicates more competitors and development in the monetary sector. Better information can result in item development
Straight-through processing: Less require for banks to make manual interventions. Potentially less hold-ups for completion consumer.
Enhanced Analytics: Enriched information will enhance analytics. More effective information collection will enhance the choice making.
