Five minutes on… the new messaging standard for UK payments
21 May 18
What benefits will the new messaging standard for UK payments bring? Find out in this quick digest of how the system will work
As in many other countries, the UK payments industry is due to move to the new global standard for payments messaging, ISO 20022, updating the Real-Time Gross Settlement system (RTGS).
The new messaging standard creates a common language for payments globally and enables a greater amount of data to be transmitted in a clearly defined and flexible structure, says the Bank of England.
The bank will open a consultation on its transition to ISO 20022 for CHAPS payments and on the contents of messages that will be used by CHAPS, Faster Payments and Bacs. The bank is eager to hear from corporates using high-value payments for buying supplies and paying tax, as the transition may bring significant change across the payments infrastructure and necessitate process and systems changes.
According to the bank, ISO 20022 will deliver significant long-term benefits to the economy.
For businesses, it will bring easier reconciliation of incoming payments data, since messages will carry more and better-structured data, such as designated fields for invoice details and references to remittance information held in external sources, for instance, invoices stored electronically.
The new message will support SWIFT gpi track and trace codes, improving traceability. Greater consistency throughout the payment chain should also lead to fewer delays in payments.
The Bank of England consultation opens in June.