Xsys.002 Format
Roxanna Bornemann
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This information is aimed at CHAPS Direct Participants, RTGS account holders, CHAPS indirect participants and technology partners. It also includes information relevant for payment users who make, receive or process CHAPS payments, or other stakeholders with an interest in the future of UK payments. CHAPS Direct Participants in particular should ensure full understanding of information in this ISO 20022 handbook, while Section 4 - non-payment message migration, is also relevant for RTGS account holders.
The current enhanced message schemas are up-to-date and align with the latest international market practice. These are the message schemas that CHAPS Direct Participants, payment system operators, and other RTGS account holders should implement and develop against, in line with the ISO 20022 approach and timelines as set out in this section and Section 1.
On 19 June 2023, we also introduced the pacs.004 return message, which does not have an MT equivalent. This replaces the practice of returning CHAPS payments via MT 202 messages. Further detail is provided in the Technical Guidance found on MyStandards.
If your organisation currently receives a daily statement directly from RTGS, you will need to update your internal systems to be able to accept the new camt.053 message for when the new RTGS code ledger and settlement engine is implemented in autumn 2024.
If you will not be ready to receive the camt.053 messages by autumn 2024, you may be able to build or buy a translator service to convert the camt.053 message into MT 950 messages for use in your internal systems.
If you have any queries, please contact RTGSRe...@bankofengland.co.uk. More information can be found in the historic publication: Migration approach of non-payment messages to the ISO 20022 messaging standard. This is a static document so please check the RTGS extranet for more detailed information and dates.
The Bank supports enhanced data and strongly encourages each Direct Participant to use enhanced data once they are capable of sending. From May 2025, we will mandate the use of Purpose Codes and LEIs for CHAPS payments between financial institutions, and mandate the use of Purpose Codes for property transactions. For further information on Purpose Codes please see the UK recommended Purpose Code list and Consultation response on Purpose Codes in ISO 20022 Payment Messaging. When SWIFT retires MT messaging for payments (currently expected in November 2025), we will mandate the use of structured remittance for pacs.008 payments. In line with international standards, we will enable hybrid addresses from November 2025, and reject fully unstructured addresses from November 2026.
We have continued our close collaboration with Pay.UK on implementing ISO 20022 messaging standards to ensure interoperability between CHAPS and the retail payment systems operated by Pay.UK where appropriate. In particular, to facilitate the introduction of Purpose Codes, the Bank and Pay.UK have jointly developed a UK recommended list of Purpose Codes.
For more detail on the Bank's updated policy timelines on enhanced data, please see our Policy Statement: Mandating ISO 20022 Enhanced data in CHAPS.
These guidance documents have been commissioned independently on behalf of the Bank, based on engagement with industry. The Bank will continue working with industry stakeholders to define market best practice guidance for implementing the ISO 20022 messaging standard in order to realise the benefits of enhanced data, including through our Enhanced Data Working Group for CHAPS Direct Participants.
The MyStandards Readiness Portal allows users to validate their CHAPS payment messages against the published enhanced message schemas. All CHAPS Direct Participants are expected to make use of the MyStandards Readiness Portal. Indirect participants and software vendors can also access the portal via a Direct Participant.
The Test Simulator provides a solution for RTGS participants to receive inward test payment messages to themselves, removing the reliance on other participants. The Test Simulator is able to ingest and generate messages from bespoke message schemas built on industry standard ISO 20022 messages.
In spring 2022, the Bank consulted with industry on a set of ambitious and innovative features that could be implemented in the renewed RTGS system, after the new core ledger settlement engine goes live. While work continues to develop these features, participants may see further guidance published by the Bank in future, potentially including new uses for existing or new ISO 20022 message types. More information, including the outcomes of the consultation can be found in the publication; Roadmap for Real-Time Gross Settlement service beyond 2024.
How To Migrate to ISO 20022? - A Complete GuideWhat is the ISO 20022 standard?The ISO 20022 standard is a global messaging standard specifically designed for financial transactions. It standardizes the structure and format of data used in financial messaging, particularly in today's real-time payments environment. ISO 20022 introduces a new data format that enables organizations to exchange information seamlessly across various financial services applications. It also facilitates the development of digital overlay services, enhancing the functionality and interoperability of payment systems.
Standardization is important in payments because it helps different payment networks and systems work together smoothly. Think of it like everyone speaking the same language instead of each person using their own.
This common language, such as the ISO 20022 format, makes it easier for banks and other financial institutions to connect and exchange payment information. It reduces problems and delays in cross-border payments and allows for more options in how payments are made.
The new ISO 20022 format allows for more detailed and comprehensive data in messages compared to the older SWIFT FIN (MT) format. It uses a common XML format, making it easier to integrate with different systems. ISO 20022 also supports greater data volume, has a user-friendly layout, and provides a structured record of data along the payments chain, enhancing transparency and traceability.
The ISO 20022 equivalent of an MT103 message is the Customer Transfer message type PACS.008. This message type is used for high-value payment schemes transitioning to ISO 20022, including SWIFT-like schemes, pan-regional schemes, and domestic schemes. Additionally, a Bank-to-Bank Transfer PACS.009 is the equivalent of MT202 and MT205 messages, with PACS.009 Cov corresponding to MT202 Cov. The ISO 20022 messaging framework also includes other message types like PACS.004, PACS.002, and CAMT.xxx for various payment and return scenarios.
A basic converter can establish connectivity between MT and XML systems, but it lacks the ability to handle data granularity and structure effectively. This can lead to data truncation and loss during the transition, especially when dealing with rich data and freeform fields.
The limitations include reduced data granularity, challenges in mapping ISO-equivalent fields in legacy formats, and potential loss of information, particularly with rich data that legacy formats cannot handle efficiently. This compromises the benefits of ISO 20022, such as enhanced data richness and improved usability.
The ISO 20022 global payments standard enhances interoperability between payment networks and schemes, making it vital for processing cross-border and cross-rail payments efficiently. Additionally, ISO 20022 enriches payments with richer data, eliminating manual parsing and creating more detailed payment chains, ensuring seamless cross-border transactions.
Yes, banks must be able to send and receive ISO 20022 messages for high-value payment rails to remain compliant with network and system updates. This is crucial for banks, especially correspondent banks, to continue transacting on behalf of their customers and pass structured, enriched data to the next party in the payment chain.
Migrating to ISO 20022 is becoming mandatory for various real-time gross settlement (RTGS) domestic and regional schemes, each setting its own migration timeline. Some schemes, like SWIFT, offer coexistence periods where both FIN and ISO 20022 messages are accepted.
However, even during coexistence periods, if a financial institution or intermediary sends an ISO 20022 message, the intermediary must be capable of receiving and forwarding that message. Any workaround, such as using a translator, still requires dealing with the global shift and its impact on correspondent banking business.
The duration of an ISO 20022 migration can vary depending on the partner and the solution chosen. Typically, a migration timeline ranges from nine to twelve months. Techzert Payment Platform is a comprehensive solution that streamlines ISO 20022 migration and replaces legacy systems, providing banks with an efficient and effective migration process.
A: Banks can migrate to ISO 20022 in a phased and controlled manner without the need for a complete overhaul of their legacy systems. Techzert's Enterprise Payments Platform offers a solution that acts as an intermediary step in the migration process. This solution integrates with existing legacy systems, ensuring compliance with ISO 20022 standards and enabling banks to manage and utilize rich ISO data effectively. By transitioning to Techzert's solution at their own pace and according to a smooth, controlled, and low-risk timeline, financial institutions can successfully migrate to ISO 20022 without disrupting their operations.
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