Messaging standards

IPSs and cross-border payment systems currently use a mix of payment message formats. Some of these message formats do not carry sufficient information for a cross-border payment, or the data is poorly structured. In some cases, switching from one message format to another leads to data corruption or truncation. These problems have a real impact on the speed and cost of cross-border payments, primarily by making sanctions screening and reconciliation harder.
In contrast, the ISO 20022 standard for payment messages provides (a) more space for Sender/Recipient-related information to be carried in a payment message and (b) a better way of structuring that information. (For example, traditional SWIFT MT messages include the account name and full address together in one single field, whereas ISO 20022 separates these data points and labels the street name, city, postal code and country separately.) The use of ISO 20022 supports automation, straight-through-processing, transparency and compliance for payments (and other financial transactions).
The ISO 20022 standard will be used exclusively for payment messages sent between Nexus Gateways. Specifically, ISO 20022 payment messages will be used during the sanctions screening and payment instruction stages. This helps to ensure that sufficient information is carried across borders to assist with sanctions screening and that information is not truncated or corrupted as it moves from system to system.
Payments industry working groups have developed the IP+ guidelines for implementation of ISO 20022 in a cross-border instant payment context.
A number of domestic IPSs do not (yet) use ISO 20022 for its domestic payments. In these cases, the Nexus Gateway will translate from ISO 20022 to the domestic format (and vice versa). The domestic IPS is responsible for defining the “translation map’, which specifies which fields in ISO 20022 should be mapped across to which fields in the domestic message format (and vice versa).
In some cases, the domestic IPS’s own message format will be unable to carry sufficient information for a cross-border payment. For example, one domestic IPS message format carries just 140 characters of data (excluding the basic account details and amount); this is not enough to include the Sender’s name, address and the Recipient’s full name, not to mention additional information such as the exchange rate to be applied to this payment. In these cases, the Nexus Gateway will store any “overflow” information as the payment passes through the IPS, before “reattaching” the additional information when the message is sent across borders or to the Source or Destination Banks.