ISO 20022How This New Data Standard Could Impact Your Business

July 26, 2022 | 9 min read

ISO 20022

In a Nutshell

In this article, we explore the new ISO 20022 messaging standard. We’ll look at what the code is, how it works, and how it could affect your business in the short- and long term.

Banks and financial institutions have traditionally conducted payments by sending messages through the SWIFT network. Starting in November 2022, however, they will begin transitioning to the new, highly structured, and data-rich ISO 20022 financial messaging standard.

By 2023, ISO 20022 will be the universal standard for high-value payments systems of all reserve currencies. It will support 80% of transaction volumes—and 87% of transaction value—globally. In Europe, SWIFT and the European Central Bank have announced ISO 20022 go-live dates of November 2022 for the standard.

So, what the heck is ISO 20022?! More importantly, how could it affect your business?

What is ISO 20022?

ISO 20022

[noun]/* ī • es • oh • to͞o • zē • rō • zē • rō • to͞o • to͞o/

ISO 20022 is an international messaging standard for financial institutions. ISO 20022 was designed to provide a standardized method for sending messages and exchanging payment data. The system uses a standard modeling methodology and a series of Extensible Markup Language (XML) and Abstract Syntax Notation (ASN.1 ) protocols.

The ISO (International Organization for Standardization) First introduced ISO 20022 back in 2004. However, it wasn’t until now that the messaging standard became widely used.

In an effort to craft an internationally accepted messaging standard, the financial industry has begun shifting focus from the SWIFT MT network to more advanced protocols. ISO 20022 is a flexible and highly-structured messaging platform that provides a data-rich framework for internationally diverse clients, including translated syntax and semantics for non-Latin alphabets.

Banks and financial institutions could benefit greatly from any means to improve communication between agencies scattered across the globe. For them, the means to send and receive more accurate data is invaluable. That’s what the adoption of ISO 20022 aims to accomplish.

Open banking, real-time gross settlement (RTGS), and instant payments have helped guide the payments industry toward this goal for several years. However, these developments are costly and time-consuming to implement. Plus, they fail to fully address various language barriers and syntax issues. Therefore, migrating to ISO 20022 will likely impact anyone involved with the payments industry.

Why is ISO 20022 Being Adopted?

The world is becoming increasingly digitized and global. As that happens, the need for better information processing and communication naturally follows.

Most large banks and financial institutions tend to develop and implement their own communication standards without input from peers or managing bodies. As you might have guessed, this practice frequently encouraged inconsistent communication. It led to information roadblocks that hamper international communication and cross-border commerce.

Introducing an international messaging standard is one way to simplify and improve communication between domestic and international agencies. It speeds up the data sharing process. This is done by including a wide array of syntax and semantics from various languages into a shared codex.

Additionally, with a standardized messaging codex, onboarding and managing partner relationships is far easier. We’ll touch on this more in the next section.

Specific Benefits of IS0 20022

Once adopted globally, ISO 20022 will create and foster a centralized language and operations framework for the payments industry. This will allow banks and processors to send and receive recognizable payment data between international agencies.

ISO 20022 isn’t controlled by any single interest and is open to frequent adaptation and improvement, meaning it is a safe addition to any network.

Crucial benefits include:

More Advanced Data

ISO 20022 includes enriched data streams that provide a more transparent, customizable picture of the elements involved in transactions and processes. Access to this wealth of information allows financial institutions to make better-informed decisions, develop safer and more efficient products, and provide customers with more effective customer service.

Aside from data quality, increased flexibility can produce more competitive pricing and innovation in the financial sector. This should be great news for merchants and consumers.

Improved Transparency

Greater transparency during information remittance often leads to a better customer experience. By enhancing visibility and liquidity flows in real-time, ISO 20022 allows banks to manage their customer approach. They’re able to improve liquidity as a result.

Seamless Integration and Compliance

By mainstreaming XML technology, ISO 20022 will improve infrastructure analytics and integration industry-wide. Less manual oversight and intervention will result in greater data accuracy, security, and fraud prevention.

Improved STP Rates

Data accuracy and efficiency are assessed in the payments industry by Straight Through Processing (STP) levels. This refers to the percentage of transactions passed through the system without manual intervention.

ISO 20022 essentially acts as a shared language between worldwide systems and agencies. It will drastically reduce STP rates and maintenance costs across formats.

Enhanced Security

With enriched data, higher detail protocols, and enhanced regulatory reporting comes more secure payment authentication and customer profiling. Also, ISO 20022 streamlines AML validations and claims investigations.

Inclusion of Non-Latin Alphabets

SWIFT MT messaging was designed for use with the standard Latin alphabet. Some non-Latin alphabets (i.e. Arabic, Mandarin, etc.) can necessitate character sets that are ten times larger than SWIFT MT messaging can handle. ISO 20022 implementation will improve this functionality for all parties involved.

Are you ready for change in the payments space? If not, help is available.


So, we now have a basic understanding of the benefits of ISO 20022 technology. But, if it offers so many benefits, why has it taken almost two decades to implement?

Let’s discuss some roadblocks the standard has faced.

ISO 20022 Implementation Challenges

With a system overhaul as broad and deep as ISO 20022, there were bound to be some hiccups along the way. The most crucial is the implementation itself.

Switching to a new system requires time, training, testing, and constant troubleshooting. And, with the November deadline fast approaching, concerns related to the system migration are manifold:


First, implementing this ISO 20022 technology will not be a fast or cheap process. Outdated SWIFT MT-enabled systems must be reviewed, mapped, and translated for the new standard according to anti-fraud rulesets and AML compliance. If those legacy systems cannot be updated, they must be replaced or converted, which would be a costly endeavor that affects budgeting between stakeholders and partners.

Whatever the case turns out to be, many banks and financial institutions might balk at the proposed standard for this reason alone.


One thing that has not been standardized is the timeline for ISO 20022 adoption. With different markets setting their own deadlines, operators and providers must plan their migration strategy according to regional rules.


ISO messages are incredibly detailed. Individual messages are much longer and denser than standard payment messages. Remember, every character used must be 100% accurate and aligned with ISO specifications. This information will be validated at dozens of points within a given message. It must therefore be formatted to accommodate this influx of data and verification. Worse, a single missing character can result in a delayed or rejected funds transfer.

False Negatives

With the increase in information compilation, sorting, and reporting comes the possibility of mistakes that could trigger a false negative or positive. While this isn’t a given for many operators, it’s a possibility that banks and processors should pay keen attention to. For this reason alone, human oversight and management will still be required to troubleshoot and mitigate such eventualities.

Lastly, even though this system was initially introduced over 20 years ago, the financial establishment does not move swiftly or integrate unilaterally. Customers rely upon banks for stability and dependability at all times. This further exacerbates the banks’ efforts to innovate in the era of instant gratification.

Standardization and improved digital communication are necessary to maintain financial marketplace and commerce stability. That said, institutions are urged to begin updating their software now, or at the earliest opportunity.

Is ISO 20022 Mandatory? When is the ISO 20022 Deadline?

In truth: not yet. It will be mandatory soon, though.

While not explicitly mandatory, ISO 20022 will be standardized for the majority of international banks by the end of the year. November 2022 will be the beginning of a coexistence period, during which standard SWIFT MT messages will be accepted alongside ISO 20022 messages. However, the adoption of ISO 20022 messages for SWIFT cross-border payments and cash management messages (CBPR+) must be complete by November 2025.

It’s in the best interests of all financial institutions to implement and test before the November 2022 deadline. Their existing products and services could become inoperable the longer they fail to act.

How Will ISO 20022 Impact Merchants?

While this doesn’t directly impact merchants, per se, it is something to keep an eye on for the foreseeable future.

Banks and processors may adjust merchant dispute rules and regulations to comply with the new standard. Dispute time limits, in particular, could be impacted. This could affect business practices and customer experience… along with your bottom line.

Ultimately, increased standardization across the financial ecosystem is bound to improve merchant interaction with banks and processors. Faster data transmission and reception is a good thing, especially when you combine it with uniform rules and regulations. That said, there will be a learning curve associated with the incoming changes.

Wouldn’t it be great if you had access to industry insiders who speak the banks’ language? Not to worry: we can help.

Chargebacks911® offers the most comprehensive chargeback and dispute management services and products available today. Contact us today for an expert perspective on the ISO 20022 switch.

We’ll run the numbers; You’ll see the savings.
Please share a few details and we'll connect with you!
Over 18,000 companies recovered revenue with products from Chargebacks911
Close Form
Embed code has been copied to clipboard