2021. What an interesting year. With the world turned upside down by a pandemic that seemingly had its sights set on...
Bank of England promises to modernise UK Payments with ISO20002
The Bank of England is promising to modernise UK Payments with an ISO20022-based infrastructure. This is likely to affect not only the CHAPS high value payment system, but also the day-to-day low-value payment infrastructure to enable better real time gross settlement and the same underpinning the payments coming from every alternative payment method across the world.
Users of various payment tokens, cards, mobiles, watches, PayPal, GooglePay, WhatsAppPay, WeChatPay and everything else that is yet to hit the market, is going to be served by the new ISO20022 message technology. What’s really interesting is the level of global co-operation that is taking place across Europe, the Americas, and Asia to help create the environment for true global interoperability.
The Regulator PSR, Pay.uk, and are proposing a Common Credit Message (CCM) that will be used as a common message format across the CHAPS, and New Payment Architecture that emerges from the Regulator.
They have established Advisory Panels, and Working Groups, in an effort to keep all stakeholders engaged in this process and to ensure all the members of the Bank of England’s clearing system are able to engage and derive the most benefit from it.
CCM will enable a much richer data set of value to be exchanged between the parties, and enable them to offer new services to customers that have been held back, in many cases, by the use of ISO8583, a protocol which has been around since the 1980s.
CCM will include a wide range of values including originators, beneficiaries, Intermediaries, structured Name and Address fields, Legal Identifiers, Personal Identifiers, Purpose Codes, Remittance Information.
The existing RTGS is facing the reality of its age. It’s become costly, and while it was built to provide a reliable 5×9 availability back in its day, it’s now had to grow into a 24×7 with 100% uptime, which is proving costly to maintain for the bank and its members.
Is this an opportunity or a threat to the NonStop Infrastructure. Central banks the world over tend to proceed with great caution given their absolutely rock-solid place in the financial sector. Other central banks have tended to under-estimate the time required to embark on this journey, and as the bank itself describes it as a journey, that word itself could be interpreted as entering into the unknown. With so many stakeholders to carry forward with them, there may be several more years of discussion before we see anything concrete emerging. Are we likely to see a revolution here? I somehow doubt it; the bank will not expose itself to risk, and so we can expect there to be more life yet in NonStop!