ISO 20022
Europe Paytech Thought Leadership

Breaking Down the Ins and Outs of ISO 20022 With Bottomline

Communication is one of the most important factors when dealing with payments. Ensuring payment information is accessible and understood across the globe is a way to bolster financial inclusion, allow the reallocation of resources to help a company grow, and improve the data companies have access to. This is the goal of ISO 20022.

Ed Ireland, senior market development manager at Bottomline
Ed Ireland, senior market development manager at Bottomline

Ed Ireland is the senior market development manager at Bottomline, a cloud-based solution that enables organisations to centrally manage and automate the execution and reporting of enterprise-wide payments. Speaking to The Fintech Times, he debunks myths surrounding ISO 20022 and delves into why he believes the technology is the future:

Can you tell me more about the Bottomline and your role within it?

Bottomline is a key player in financial messaging. Providing outsourced services to over 350 clients globally. I work in our product team, with PnL responsibility for our platform services. In addition, having planned the ISO 20022 program to ensure our clients are ready for the market infrastructure moves to ISO 20022, starting from early this year and continuing next year and beyond.

What is ISO 20022 in a nutshell? 

ISO 20022 is the emerging global standard for payments messaging. It creates a common language and model for payments data across the globe. This provides higher-quality payment information than other standards and adapts to new needs and approaches.

Many market infrastructures, including SWIFT, are moving their messages to ISO 20022 over the next two years. Clearing house automated payment system (CHAPS) and TARGET2 Euro payment (T2) are on track for delivery. Plus, SWIFT will adopt the rulebook of the cross-border payments reporting (CBPR+) working group, where there will be a coexistence phase of MT/MX messages up until 2025.

Within five years, it’s predicted that around 80 per cent of high-value global payments by volume and 90 per cent by value will have migrated to ISO 20022.

What are some of the biggest challenges companies postponing migration may face? 

The challenges will be multiple and grow with time. Until you are ISO 20022 native, you will need to manage translation, enrichment and a co-existence of standards with counterparties and across your back-office systems. Increasingly it will be very difficult to manage the data required in ISO 20022 in the legacy standards.

What are some of the benefits of having a unified payments language?

Some of the benefits of having a unified payments language include a global interoperability across all operators and a rich remittance data. This includes up to 140 characters of unstructured or structured reference data.

A unified payments language also increases data quality through enhanced structure and granularity, reducing manual intervention and improving decision-making. Uniform and reusable terms and message components are another benefit. These can be easily tweaked and amended to handle payments globally across all other banks and countries.

Harmonisation across payment systems and payment types is also possible, with over 70 countries having already adopted ISO 20022. Unified payments language also can be a base for innovative service offerings and products, and can also lead to a lower overall operational costs, as XML simplifies development, maintenance and support.

Starting to use ISO 20022 is not the end of the journey. Once participants are familiar with the standard, this will then be the catalyst for the introduction of more and structured information. This will then be the beginning of the real benefits of adopting ISO 20022.

How can resources be put to better use, should a company look at migrating to ISO 20022?

Companies could leverage ISO 20022 and APIs as the standard for data exchange in payments within the applicable regulatory and compliance regimes. In addition, companies could achieve higher automation, enhanced STP and redesigned processes, all with the goal of reducing friction.

It can also reduce costs by dismantling obsolete legacy applications, increase the effectiveness of fraud detection and prevention measures, and improve insight into the business purpose of customer payments as a base for innovative value-added services. Companies can also develop new integrated consumer-oriented services and products to meet the increasing demand for speed, transparency, and granular tracking information.

How long would it take to complete the change in process and how costly would this be to companies?

A simple connectivity upgrade can be completed at a relatively low cost and over a few months. However, it is the wider impact of ISO 20022 that needs to be considered. Payment, screening, matching and monitoring systems need to be able to support ISO 20022 and the additional data elements and increased structure and granularity. This will require upgrades, development and project work to improve static data. This work will vary enormously by institution.

How would ISO 20022 make it easier for banks to be compliant?

Data will be more extensive and structured. This will allow for greater accuracy and more relevant information to be passed with transactions. Allowing banks to ensure better compliance through more comprehensive and accurate monitoring.

Are there any drawbacks to ISO 20022?

Technically there is more data to hold, process and exchange. As a standard, it is more flexible and allows for more data to be exchanged. Market practice will be key to ensuring that there is consistency in what is expected for transactions in each market. Along with global alignment through such groups as HVCS and CBPR.

How long will it take for everyone to change to it? / Will there ever be a time where everyone has migrated to it?

Most institutions will be technically ready to receive ISO 20022 in 2023. However, many will still be processing in the legacy standards. We will then have a multi-year period of co-existence as markets and participants move over to using ISO 20022. We may see a slow take-up in the beginning and then a snowball effect as main markets and players start to send and ask to receive ISO 20022.

Final thoughts

Starting to use the tech is not the end of the journey. Once participants are familiar with the standard, this will then be the catalyst for the introduction of more and structured information. This will then be the beginning of the real benefits of adopting ISO 20022.


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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