I had an interesting conversation recently that followed on from the Sibos 2011 Standards Forum in Toronto where the Canadian Payment Association (CPA) discussed its plans to use ISO 20022 for both High and Low value payments. The CPA has now put out a
discussion paper that goes further than most countries’ thinking today. The current trend is that ACH (low value) payments are moving to ISO 20022 standards, RTGS (high value) payments are moving to SWIFT standards, and some countries have started moving
ACH payment to (near) real time (UK being ISO 8583 based and Singapore being ISO 20022 based, etc).
But the Canadians are thinking differently, they are discussing moving ALL payments to ISO 20022, high and low value. They say the ISO 20022 messages contain all the data that current and future regulations (like Dodd Frank and remittance info) require
and can handle both high and low value payments, whereas other standards cannot; and of course XML messages are far easier to maintain.
Seems a sensible idea to me. If you are going to make changes to prepare for an increasingly on-line, real time, global market place, why stick with a standard based on old technology and why run multiple different payment systems? Take this to its logical
extension, today we say high and low value, but more and more we are saying high and low care. The trend is already there where systems allow clients to choose between high care (important, immediate, lots of validation) payments and low care (not urgent,
value tomorrow or the day after). If all payments were ISO 20022 and the systems could cope with volume and priority why would you need two different systems for ACH and RTGS? Now you might want two identical load balanced systems in case one fails, but
that’s still a huge saving in infrastructure and annual standards maintenance. This may also finally see the light at the end of the tunnel that is the journey to retire the legacy SWIFT MT messages. I guess I am way out there with this; no-one would do
this today, would they, makes you think?