The Bank of England is consulting on a new messaging standard for UK payments

Together with many other countries, the UK payments industry (CHAPS, Faster Payments, Bacs) is moving to the new global standard for payments messaging: ISO 20022. This new messaging standard for transmitting payments data creates a common language for payments across the globe. It also allows a greater amount of data to be sent in a clearly defined and flexible structure. In early June the Bank will be consulting on the contents of the message, which will be used by CHAPS, Faster Payments and Bacs, as well as how the Bank will transition to the new standard for CHAPs payments. Register for the consultation on the Bank’s website.

What are the potential benefits for your organisation?

Adopting this global standard promises to deliver significant long-term benefits for the economy as a whole, as well as, individuals, businesses (within and outside the financial sector) and the public sector. Possible benefits for businesses include:

• Reconciling incoming payments could become easier. The message will carry more and better structured data – known as remittance information. This may include:
  • Designated fields for invoice detail
  • References to remittance information held in external sources, such as invoices stored electronically
  • A wider set of available characters available when using free text
  • Legal Entity Identifiers (globally unique reference numbers)
• The new message will support SWIFT gpi track and trace codes. If offered by your bank, you will be able to track international payments the same way you would track a parcel.
• You should experience fewer delays in payments. A better structured message improves machine readability throughout the payment chain.
• The new messaging standard supports innovation and competition. This could lead to improved customer services, products and experiences harnessing the enriched data contained in the message.
• We’re working to join up message requirements across CHAPS, Faster Payments and Bacs enabling efficiency benefits and cost reductions across the industry, as well as potentially enhancing the resilience of service in the event of an operational incident.

How might your payments change?

You and your payment service provider may need to adapt to the new messaging standard and accompanying data requirements. This means you might have to make process and technology changes. Getting the design and approach to implementation right is critical to its success, so we are now seeking views from a wide range of organisations. For more information, or to register your organisation, please contact RTGSEngagement@bankofengland.co.uk or visit the Bank’s website.