The United Kingdom is upgrading its instant payment system to comply with ISO 20022 #
Since the world’s standard for instant payments has evolved, the UK now needs to modernise the Faster Payments System. Despite the Faster Payment System being the most popular for businesses in 2022, it is going through the upgrading process known as New Payment Architecture (NPA) program.
The relatively new ISO 20022 has emerged as a preferred financial messaging standard and many modern payment systems are now deploying it. SWIFT and the Eurosystem are getting ready to adopt the new standard in March 2023, and The Clearing House will implement the ISO 20022 in November. Fedwire goes slowly, setting a deadline of March 2025 to transition.
This standard makes interoperability between different payment systems more easily achievable, which explains why so many world-wide payment systems are adopting it. Aside from this, ISO 20022 has an opportunity to embed enhanced data into the messages which multiplies the perspectives of adding additional features to the infrastructure layer.
The company responsible for the major retail payment system in the UK, Pay UK, claims that it intends to make New Payment Architecture more manageable and efficient to use and connect to compared to existing infrastructures.
In the press release Pay UK claims that Faster Payment System rulebook and Bacs documentation have become unwieldy over time and with the NPA they focus making it the opposite, “easy to use and search”.