ISO 20022 XML transition

ISO 20022 XML transition

Payments are core to domestic and international commerce and financial markets. Ongoing digitization requires a frictionless payment experience that proprietary messaging systems cannot deliver. The lack of common terminology has been a key challenge across payment types. The use of different messaging standards creates problems in automating payments from end to end. ISO 20022 is solving this challenge through a globally accepted standard that improves payment efficiency while reducing risk. 

Real-time payment networks, such as The Clearing House’s RTP network, and high-value payment systems in more than 70 countries already use ISO 20022. By 2025, it will become the global standard for payment messaging, replacing propriety formats used by U.S. payment system operators such as CHIPS and Fedwire Funds. 

Wells Fargo is a key player in shaping the financial industry’s transition to ISO 20022. By leveraging this global standard, we will provide our customers with an optimal payment experience based on their needs. 

Understanding the ISO 20022 transition

What is ISO 20022?

ISO 20022 is a strategic industry initiative to replace proprietary message formats with a standard format and definition of data elements that can improve payment processing efficiency and promote interoperability among payment systems around the world. 

What makes ISO 20022 special is its use of Extensible Markup Language (XML), which provides a common language for systems and people to exchange information about financial business. ISO 20022 uses a dictionary of common message components that are reusable in other message formats, enabling payment system operators to customize the data elements to meet their unique needs.

Why is it important?

Data-rich payment messages will post automatically, eliminating manual touchpoints for faster reconciliation, increased straight-through processing, and reduced risk of fraud. Potential benefits include the following:

  • Increased payment efficiency and automation. Payments move seamlessly through domestic and cross-border payment systems.
  • Reduced costs and potential risk. The standard format enables automated posting of files, eliminating manual entry and intervention. 
  • Enhanced customer experience. Data-rich payments provide consistent, detailed transaction information for customers. For example, MX messages can contain up to 10,000 KB, compared with 100 KB for messages today. 
  • Improved compliance. The common language reduces false positives during sanctions screening.

When is the transition happening

Financial infrastructures worldwide must adopt ISO 20022 payments by 2025. Payment system operators are moving to the standard on different schedules, beginning in November 2022. 

Chart depicting when payment system operators will begin accepting ISO 20022 MX payments. SWIFT starts in November 2022. CHAPS starts in April 2023. Fedwire Funds, CHIPS, and Europe Target 2 start in November 2023.

Target transition dates for selected payment system operators

Payment system operator
Transition date
Starting November 2022. SWIFT MT and ISO 20022 MX messages will coexist until mid-2025. Originators can send payment messages in either format: SWIFT MT or ISO 20022 MX.
Fedwire Funds, CHIPS, and Europe Target 2

November 2023. All payment messages must use the ISO 20022 MX format starting in November 2023.

SWIFT MT message transition

SWIFT MT messages are no longer sufficient to keep up with financial industry mandates and business demands. ISO 20022 MX messages will replace SWIFT MT series messages starting in 2022. Some of the message types in the initial transition include the following:

Message type SWIFT MT ISO 20022 MX
Payment initiation MT 101 series pain.001
Payment clearing and settlement MT 103, 200, 202, 202 COV, and 203 series pacs.008, pacs.009, and pacs.009 COV
Cash management MT 900/910 series camt.054
Cash management MT 940/950 series camt.053
See our ISO 20022 Quick Reference Guide (PDF) for details on message comparisons, field changes, and more.

What we are doing to prepare

We are a founding member of SWIFT’s Payments Market Practice Group (PMPG). We’re also an active participant in the key industry working groups that are shaping the transition, including HVPS+, CBPR+, IP+, and various technical user groups. 

Payment messages

We plan to start accepting ISO 20022 MX payment messages in November 2022, but there’s nothing you need to do now. During the migration period, we will send legacy MT and ISO 20022 MX payment messages in the same format we receive them. For example, if we receive a payment message in MX format, we’ll send any related messages in MX format.

Cash management messages

We are adding ISO 20022 MX cash management messages in phases.

  • Customers who currently receive cash management messages by transmission in MX format will continue to receive those messages in MX format.
  • Customers who currently receive cash management messages about cross-border payments in MT format will continue to receive those messages in MT format. They will not receive cash management messages in MX format until we add that functionality at a later date.  

We’re also preparing our services to display ISO 20022 messages, starting with our Commercial Electronic Office® (CEO®) Treasury Information Reporting and CyberInquiry services.

 Learn more