ISO 20022 & Smart Instant Payments with Guest Steve Wasserman
Wrestling Payments Podcast: Season 2 - Episode 19
Episode Summary
In this episode of Wrestling Payments, host Joseph Casil talks with Steve Wasserman from Photon Commerce about the growing importance of ISO 20022 and its impact on the global payments landscape. Wasserman delves into how this emerging standard is transforming instant payments and financial messaging by providing a more structured and data-rich approach to payment transactions.
Wasserman explains the benefits of ISO 20022, including its ability to support more detailed payment information and enable faster, automated processing. He highlights how this standard is being adopted across payment systems worldwide, such as FedNow and RTP, and how it improves interoperability between financial institutions, paving the way for global payments integration.
The conversation also covers the future of instant payments, the role of AI in fraud detection and compliance, and how businesses can leverage ISO 20022 to streamline their processes. Wasserman encourages payment professionals to embrace the standard to stay competitive in the evolving financial landscape.
Download Episode Transcript
Guest-at-a-Glance
💡 Name: Steve Wasserman
💡What they do: Technology Architect
💡Company: Photon Commerce
💡Noteworthy: Specializes in ISO 20022 and instant payment innovations, with years of experience in fintech.
💡 Where to find them: LinkedIn
Key Insights
ISO 20022 is Revolutionizing Global Payments
ISO 20022 is transforming how payment systems operate globally. Steve Wasserman explains that this emerging standard allows for a more structured and data-rich messaging format, which enables better automation and transparency in financial transactions. ISO 20022 is being adopted by systems like FedNow, RTP, and SWIFT, helping institutions streamline operations and enhance interoperability. The added benefit of detailed remittance information means businesses can automate straight-through processing, reducing errors and manual intervention. This standard is expected to play a critical role in the future of global payments by simplifying complex processes and making cross-border transactions faster and more secure.
Request for Payment Solves Key Payment Issues
One of the key features of ISO 20022 is its support for "Request for Payment" functionality. Wasserman explains that this capability allows businesses to request payment from a payer without needing to rely on traditional debit mechanisms. The payer can schedule or approve payments, providing more control and reducing the risk of failed transactions. This innovation is especially useful for businesses that need flexibility in payment timing, making it easier to meet deadlines without incurring late fees or dealing with business interruptions. By incorporating this feature, companies can simplify how they manage payments while ensuring greater transparency and efficiency.
AI and ISO 20022 Enhance Fraud Detection
Steve Wasserman highlights how ISO 20022’s structured data format works seamlessly with AI to boost real-time fraud detection and compliance capabilities. Because ISO 20022 includes rich, detailed data fields, AI tools can analyze transactions more effectively, identifying patterns that signal fraudulent activity. This integration of AI helps financial institutions respond faster to potential threats while enhancing their ability to comply with regulatory requirements. Wasserman underscores that as the financial ecosystem grows more complex, the combination of AI and ISO 20022 will become increasingly important for maintaining secure, efficient payment systems.
Episode Highlights
The Growth of ISO 20022 as a Global Standard
Timestamp: [00:08:00 - 00:09:00]
Steve Wasserman explains the importance of ISO 20022 as an emerging global standard for financial messaging. He highlights its adoption in systems like FedNow and RTP, and emphasizes how it is gaining traction worldwide due to its structured data format, which allows for more detailed and efficient communication. ISO 20022 is enabling faster, more secure cross-border payments and is transforming how financial institutions process transactions.
"ISO 20022 is being adopted globally, and systems like FedNow and RTP leverage it for all their messaging. It’s a rich format that brings a new level of structure to financial transactions."
AI’s Role in Fraud Detection and Compliance
Timestamp: [00:25:00 - 00:26:00]
Wasserman discusses how AI can be integrated with ISO 20022 to enhance fraud detection and compliance reporting. The structured data in ISO 20022 makes it easier for AI to analyze transactions in real time, allowing for faster detection of suspicious activity. This integration streamlines compliance workflows and enables more automated responses to potential risks, offering both financial institutions and regulators a powerful tool for securing transactions.
"ISO 20022’s structured data allows AI to perform real-time fraud detection and compliance reporting, making financial systems more secure and compliant."
The Benefits of Real-Time Payments for Businesses
Timestamp: [00:10:00 - 00:11:00]
Wasserman highlights the importance of real-time payments (RTP) for businesses, particularly in improving cash flow management. With RTP, businesses can send and receive payments instantly, reducing the need for waiting periods tied to traditional payment methods. This helps companies maintain liquidity and meet deadlines, especially when paying invoices or managing payroll. RTP also eliminates the risk of late fees by ensuring funds are transferred in real time, regardless of holidays or weekends.
"Real-time payments enable businesses to manage cash flow more effectively, ensuring payments are received instantly and reducing the risks associated with traditional payment delays."
The Challenge of Implementing New Payment Standards
Timestamp: [00:37:00 - 00:38:00]
Wasserman acknowledges the challenges financial institutions face when implementing new payment systems like ISO 20022. He explains that many banks operate on legacy systems, making it difficult to adopt new technologies quickly. However, he also emphasizes that planning for the future is essential to remain competitive, as businesses and consumers increasingly demand faster and more transparent payment solutions.
"Banks can’t rip and replace legacy systems overnight. They need to walk incrementally into new systems like ISO 20022 to stay competitive in the next generation of payments."
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