FedNow℠ ISO 20022 Message Specifications: Why It's Important to Financial Institutions

On March 31, 2021, the Federal Reserve announced the release of the message specifications to be used with its FedNow℠ Service when it launches in 2023. The message specifications will be based on the International Organization for Standardization's (ISO) 20022 message standard.

About the ISO 20022 Standard

Established in 2004, today, ISO 20022 is the global messaging standard supporting financial transactions. It allows for the exchange of a robust amount of information, across any platform or system, in a standard, consistent manner, creating benefits of efficiency and interoperability. As such, an ever-growing number of payments networks and systems, financial institutions, businesses and other payments services stakeholders are leveraging the ISO 20022 standard in various ways to support the exchange of money and information.   

FedNow's ISO 20022 Message Specification and Importance to FIs

The release of FedNow's message specifications presents an important opportunity for all financial institutions. With its release, FIs can begin discussions internally and with their core providers on approaches for incorporating ISO 20022 messaging into their systems, if the capability is not currently in use. Implementation of ISO 20022 capabilities will enable FIs to support faster payments through FedNow and other systems that leverage the messaging specification. Additionally, incorporation of ISO 20022 capabilities serves as an opportunity for FIs to evaluate existing solutions and new capabilities that become available with use of the standard, and processes and procedures that can be enhanced with the efficiencies the standard offers.

FedNow's ISO 20022 Message Specification

FedNow's ISO 20022 specifications detail the message formats, content, and flows that the Service will leverage upon launch. The messages supported in the initial launch will include customer/member and financial institution credit transfer, payment return, request for payment, payment status, and other administrative and account reporting messages.

Accessing FedNow's ISO 20022 Specifications

FIs can access FedNow's ISO 20022 message specifications through the MyStandards® platform. The platform contains the ISO message specifications, message flow diagrams, and an implementation guide. It also offers additional tools for financial institutions and other payments service providers planning to integrate their systems with the FedNow Service. Access to MyStandards requires an account, which can be created at: https://www2.swift.com/idm/public/selfRegistration.faces. Once an account is created, access to MyStandards will be granted.

Additional Resources

To learn more about the ISO 20022 standard and how it will serve faster payments, take a deeper dive with NEACH's "Building Blocks of Faster Payments" on-demand series.

 

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