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Table of Contents

Lead Story

Understanding the 2015 U.S. fraud liability shifts Version 1.0 – May 2015

News

Industry Update

Samsung Pay to arrive Sept. 28

Debit card growth data, Durbin ruling

Square's fee for Instant Deposit might not matter

ISO 20022 blazes trail to real-time global payments

Cash growth eclipses mobile payments

Features

The power of social

Mobile shoppers on fast track

Views

EMV is coming along, slowly

Patti Murphy
ProScribes Inc.

Sharks and sharps: Who's buying your bankcard business?

Adam Hark
MerchantPortfolios.com

Education

Street SmartsSM:
The power of residual income – Part 2

Jeffrey I. Shavitz
TrafficJamming LLC

Bring Tour de France teamwork to your business

Jeff Fortney
Clearent LLC

The one-man show: Approaches in B2B sales

John Tucker
1st Capital Loans LLC

EMV myths debunked

Company Profile

Worldpay

New Products

Comprehensive, cloud-based business ecosystem

Jory
Jory LLC

Reliable, secure e-commerce authentication

PayVerifi
PayVerifi

Inspiration

Back to school at work

Departments

Readers Speak

Letter from the editors

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

September 14, 2015  •  Issue 15:09:01

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ISO 20022 blazes trail to real-time global payments

Payments industry globalization reached a tipping point Aug. 11, 2015, when Payments UK and the International Organization for Standardization (ISO) published the first draft of ISO 20022. The harmonized set of XML messaging standards is based on a shared data dictionary and business process model designed to improve efficiencies across global payment platforms. The Federal Reserve described it as "an enabler of a single, common 'language' for global financial communications that can assist organizations in responding to evolving demands."

The universal platform was introduced by a working group of the ISO, an independent, non-governmental body that develops voluntary international standards. The 162-member organization, established in 1946 and based in Geneva, Switzerland, has published more than 19,500 standards affecting multiple industries, including technology, food safety, agriculture and healthcare.

"The new 'rule book,' based on the experience and knowledge of 50 organizations around the world, including ACI Worldwide, will allow others to successfully apply the standard in an immediate payments environment," said Barry Kislingbury, Senior Principal Solution Consultant at ACI Worldwide. "The first draft, created in just a couple of months, focuses on the messages and workflows needed in this environment and highlights a small number of gaps that the working group will need to focus on, to resolve in the short term."

Kislingbury, impressed by the committee's ability to create a working draft in record time, expects the standards to establish a foundation for "a global, interoperable, immediate payments environment" that will benefit consumers and payments industry stakeholders alike.

Increasing rationale for U.S. adoption

In October 2013, a stakeholder group comprised of the Federal Reserve Bank of New York, The Clearing House Payments Company LLC., NACHA – The Electronic Payments Association and the Accredited Standards Committee X9 – Financial Industry Standards Inc., began to evaluate the business case for U.S. adoption of ISO 20022. The group enlisted the aid of an independent consultant who recommended a phased approach, citing global momentum, global competition, cost savings and improved efficiencies as critical factors.

Open source, open invitation

The Federal Reserve and U.S. stakeholders are developing an implementation strategy for ISO 20022 in U.S. payment transactions. The group's initial focus involves using ISO 20022 in wire transfer and automated clearing house transactions to improve end-to-end efficiency in domestic and cross-border payments.

This approach is part of a five-pronged effort described in Strategies for Improving the U.S. Payment System. The strategies include engaging stakeholders; identifying effective approaches for safe, ubiquitous and faster payments; working to advance security and reduce fraud; achieving greater end-to-end efficiency in domestic and cross-border payments; and enhancing Federal Reserve Bank payments, settlement and risk management services in 2015 and beyond.

The Fed also cited numerous use cases to support its contention that upgrading to a modern, XML-based common format for payment messages can expand the knowledge base of formatting experts in the payments industry. This agency anticipates the measure will ease support of proprietary, legacy formats as seasoned format experts change jobs and retire.

Proprietary message formats can also adversely affect the speed and efficiency of wire transfers, the Fed noted. Many banks maintain mapping routines to ensure correct mapping of data for wire transfers to accommodate legacy and cross-border formats. Participating parties in inter-bank transactions may experience limited visibility into end-to-end transaction flows.

ISO 20022 payment and cash management message formats have structured messages that support real-time payment tracking and reporting. For further information, visit https://fedpaymentsimprovement.org/get-involved/iso-20022/.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems