Banks, Corporates Show Continuing Interest in ISO 20022
It’s been around two decades, but in many ways, ISO 20022 continues to be treated like the new kid on the block.
“You do just see interest in it continue to increase,” said Kathy Levin, Nacha Senior Director, Strategic Payments Analyst, Network Development & Strategic Initiatives.
ISO 20022 is a multi-part international standard which describes a common platform for the development of messages. It was the focus of a recent edition of Nacha’s Payments SmartCast podcast.
Already in use by FedNow and RTP, many financial institutions are converting to ISO20022 for wires. But as Samantha Carrier, Senior Director, Nacha Consulting Services, and podcast moderator noted, “There’s been increased focus on ISO and really the potential of expanding adoption of the standard into other rails.” Which begs the question: What role might there be for ACH?
“What we have seen in the U.S. historically around ACH is more of an ISO 20022 ACH integration strategy, as opposed to an ISO 20022 conversion strategy,” said Levin. “So that’s why Nacha has really focused on developing tools and solutions to help these organizations integrate ISO 20022 into their ACH operations.”
Tricia Balfe, CEO of XMLdation, a Nacha Preferred Partner for Compliance and ACH Experience, which provides payment testing solutions that help with ISO 20022 adoption, said she sees strong ongoing interest in ACH.
“ACH continues to be really important, and it is a very cost-effective way of making payments,” said Balfe. When XMLdation delivers its solutions to American banks, “ACH payment files are invariably their top priority.”
And the interest goes beyond banks.
“When corporates want to automate, they will ultimately want to automate all of their payments. That’s ACH payments, SWIFT, cross-border, wires—everything. They’ll want to submit a bulk payments file that includes all of the different payments. So, ISO 20022 is a good choice here,” said Balfe. “When a bank introduces ISO 20022 it’s usually because it has corporates who are looking for this type of service where they combine all payments together.”
Listen to the complete podcast here.
Learn more about XMLdation and the Nacha Preferred Partner program.
Nacha’s ISO 20022-to-ACH Mapping Guide & Tool is available on the Nacha website.
