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- Ripple, XLM, and IOTA’s involvement with ISO 20022 paves the way for possible integration with SWIFT.
- SWIFT was recently awarded as the best cross-border payment provider.
The lack of interoperability among financial institutions led to the introduction of ISO 20022 to provide international standards for the exchange of electronic messages between financial institutions. In May 2020, Ripple announced its membership in the ISO 20022 Standards Body.
According to reports, XLM and IOTA are all part of this body and have paved the way for a possible SWIFT integration. In a recent post by Stephen Lindsay, the business lead for Swift’s strategic platform, he lauded the industry’s collaboration and called for payment standardization. According to him, the emergence of the ISO 20022 has addressed some challenges including inefficiencies and increased costs developed by the old format for payment.
When it comes to payments, it’s no different. When money moves across borders, we rarely think about the layers of communication before payment is executed. Over time, formats used for payments messages in different regions have developed idiosyncrasies requiring translation, creating bottlenecks that cause inefficiencies and increased costs.
Specialists use their jargon for payment messages. They usually use different words with the same meaning that require classification and delay execution. This has caused inefficiencies in payment.
Lindsay’s Observation and How SWIFT Can Get Involved
His observation is that the ISO 20022 messages contain better data quality than what has ever been present in cross-border payment. With this, businesses can deploy resources effectively and efficiently. Some of the other merits include improved fraud detection and relevant products.
This transition to a standard underpinned by rich data enables global connectivity and compatibility with virtually all payment systems worldwide. It also offers much higher levels of resilience and efficiency because messages can be re-routed, if needed, and undergo straight-through processing to overcome outage risks and reduce delays.
He further explained that ISO 20022 is the most flexible financial messaging standard developed to date, and can fit in any environment in this constantly changing financial world. This can ensure that financial transactions can be made and received with the same language guaranteed even amid new technologies and economic shifts.
Market participants are increasingly aware of how important efficient cross-border payments are to international commerce. This is why the G20 released a roadmap for improving international transactions, and ISO 20022 is directly aligned with this ambition as a central pillar of a more inclusive and efficient payments ecosystem.
At the just-ended MEA Finance 2023 Annual Banking Technology Awards, SWIFT was named the best cross-border payment provider.
We’re thrilled to have been named as the best cross-border payments provider at the MEA Finance 2023 Annual Banking Technology Awards! 🏆
The event recognises banks and technology businesses for developing smarter banking solutions and driving growth in an increasingly… pic.twitter.com/KQg4AMjGRO
— Swift (@swiftcommunity) May 18, 2023
With much interest in interoperability, SWIFT was reported to be joining ISO 20022 in March 2023. By November 2025, all messages including sending and receiving would be based on ISO 20022. Between March 2023 and November 2025, financial institutions would be allowed to send MT messages while adapting to the new ISO 20022 standards. With the current involvement of Ripple, IOTA, and XLM, it is expected that other crypto networks join.
