What is ISO 20022? The Global Financial Messaging Standard for Modern Payments

ISO 20022 is a global financial standard that supports real-time payments like FedNow® and RTP®, Fedwire® payments, and international payments using SWIFT . It provides the specifications required for seamless transactions, offers the ability to send data with a payment, and creates a common language for payments worldwide.

Specifically, the ISO 20022 standard supports financial messaging and uses extensible markup language (XML) syntax. ISO 20022 messages use a common data dictionary, can carry a considerable amount of information, and can support payment messages from end to end, including the following:

• Payment initiation (corporate to bank)
• Interbank settlement (bank to bank)
• Cash management (bank to corporate)

According to the ISO Standards Organization, “ISO 20022 is a single standardization approach (methodology, process, repository) to be used by all financial standards initiatives. It describes a common platform for the development of messages using:

• a modelling methodology to capture in a syntax-independent way financial business areas, business transactions and associated message flows
• a central dictionary of business items used in financial communications
• a set of XML and ASN.1 design rules to convert the message models into XML or ASN.1 schemas, whenever the use of the ISO 20022 XML or ASN.1-based syntax is preferred.”

• Real-time payments – Both FedNow and RTP run on the ISO standard, enabling seamless and efficient processing of real-time payment transactions. For more information on real-time payments, visit our FedNow and RTP pages.
• Fedwire – Fedwire is migrating to the ISO 20022 standard as of March 10, 2025.  With this implementation, the Federal Reserve will be sunsetting the existing proprietary Fedwire Application Interface Manual (FAIM) format and replacing all FAIM messages with ISO 20022 messages. All banks and credit unions using Fedwire are required to comply with the ISO 20022 standard. For more information on how you can prepare for the Fedwire migration to ISO 20022, visit our Fedwire page.
• International payments – ISO 20022 is the international payments standard utilized by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). It incorporates rich data that creates higher-quality global payments.

ISO 20022 introduces a universal language for financial information that simplifies and streamlines business transactions worldwide. Facilitating the seamless transmission of crucial transaction information alongside payments, this standard can be used to send detailed data. It also enables greater interoperability with global payments systems.

These benefits translate into opportunities for banks and credit unions with their business customers/members, including:

• Introduce new revenue streams by developing value-added services. ISO 20022 data provides the opportunity for automation tools, data analytics platforms, and customized financial products.
• Attract new customers/members by utilizing ISO 20022 for more advanced payment services, including data analytics and straight-through processing.
• Strengthen relationships with current customers/members by providing tools and services that enhance the customer banking experience.
• Gain a competitive edge by adopting ISO 20022 message formats early, demonstrating a dedication to innovation and efficiency.

83% of financial institutions view ISO 20022 as an engine for innovation and a catalyst for growth. [CM8] That’s because ISO 20022 allows banks and credit unions to enhance automation, provide value-added services, and increase competitiveness.

Specifically, for business customers/members, ISO 20022 messaging enriches the data available from financial transactions, enabling banks and credit unions to:

• Enhance transaction transparency by enabling businesses to track and report financial flows more accurately, leading to better cash management, more precise forecasting, and enhanced liquidity planning.
• Improve reconciliation processes by using ISO 20022 to automate and streamline operations.
• Support more efficient supply chain management by providing detailed and standardized data across different jurisdictions and financial institutions.
• Bolster risk management and fraud prevention by providing detailed transaction information.
• Strengthen compliance by enhancing payment transparency.
• Streamline cross-border payments by standardizing the transmission of transaction information globally.

Partnering with a provider who offers ISO 20022 as a seamless service will help ensure your bank or credit union can take advantage of its benefits and efficiencies. Look for a partner who:

• Provides a single native platform for all your payment rails, covering both domestic and international networks
• Enables effortless compliance
• Delivers an ISO-native platform for FedNow and RTP, as well as a Fed-certified Fedwire solution and SWIFT MX-ready platform
• Offers seamless integrations for value-added services
• Supplies rich data insights to drive innovation
• Understands the global payments landscape and its evolution and can provide recommendations on how to use ISO 20022 now and in the future

For general information, on ISO 20022, visit iso20022.org. To explore ways to leverage ISO 20022 with Finzly,  speak with one of our payment experts.