ISO® 20022 – Standardizing Payment Technology Leads to Greater End-to-End Efficiency
The ISO 20022 standard is being adopted by an increasing number of the world’s payments clearing and settlement systems, and is expected to grow significantly in years to come.
As part of the work to modernize business-to-business (B2B) payments, the Federal Reserve is focused on providing consistent ISO 20022 implementations for the industry. This widespread adoption will enable ISO 20022 to become a universal messaging language for financial players and help push new payment technologies forward.
What is ISO 20022?
ISO 20022 is a harmonized set of extensible markup language (XML) messaging standards across major financial services domains (cash, securities, trade, card and foreign exchange) based on a shared data dictionary and business process model. It has emerged as an enabler of a single, common “language” for global financial communications that can assist organizations in responding to evolving demands. For businesses, ISO 20022 has messages for payments, cash management and remittance information. Corporates can benefit from ISO 20022 as a means to simplify and standardize their treasury and payment operations.
Advancing Business-to-Business Payments Efficiency
The ISO 20022 standard supports financial messaging and uses XML syntax. ISO 20022 messages can carry a considerable amount of information and are based on a common data dictionary that can support payment message flows from end to end, including the following:
- Payment initiation (corporate to bank)
- Interbank settlement (bank to bank)
- Cash management (bank to corporate)
Industry organizations are working to promote the adoption of ISO 20022 for B2B payments. In 2022, the Accredited Standards Committee X9’s ISO 20022 Market Practices Forum released the ISO 20022 Remittance Content Market Guide to clarify what ISO 20022 remittance information to use with B2B payments. Read more about what’s included in the guide, why it matters and how this guide will further advance straight-through processing for B2B payments.
ISO 20022 Adoption for the FedNow® and Fedwire® Funds Services
In 2015, the Federal Reserve published the Strategies for Improving the U.S. Payment System (PDF) paper which outlined as one of the key strategies to achieve greater end-to-end efficiency for domestic and cross-border payments.
Adoption of ISO 20022 supported this strategy, and implementation was driven by a stakeholder group convened by the Fed and validated by an independent consulting firm in 2013, comprised of:
- The Federal Reserve
- The Clearing House Payments Company L.L.C.
- Nacha
- The Accredited Standards Committee X9 – Financial Industry Standards, Inc.
The stakeholder group assessed the business case (PDF) for or against adoption of ISO 20022 payments messages by U.S.-based payment clearing and settlement infrastructures, financial institutions and corporate customers. Ultimately, the group identified strategic reasons to adopt the ISO 20022 standard for U.S. payment transactions to achieve greater end-to-end efficiency for domestic and cross-border payments.
In July 2023, the Fed launched its new instant payments platform – the FedNow Service, which leveraged ISO 20022 message formatting from inception.
Then, in July 2025, the Fed adopted ISO 20022 to align the Fedwire Funds Service message format with the global standard to help improve payment processing efficiency and promote interoperability among high-value payment systems around the world.
ISO 20022 Adoption Considerations for ACH Payments
To assist financial institutions supporting early ISO 20022 adoption, Nacha developed a Mapping Guide to help corporate customers translate ISO 20022 payment instructions into ACH payments. Using a standardized way to translate ISO 20022 payment messages will provide more consistency for standard processes, which will ultimately enhance and improve operational processes.