WASHINGTON—The Federal Reserve Board announced it will adopt the ISO 20022 message specification for the FedWire Funds Service.
The Fed plans to adopt the new message format for Fedwire using a single-day implementation approach that leverages a controlled testing environment. The notice also invites the public to comment on the revised plan for migrating to the new message format, which was previously proposed to run in three separate phases. The single-day migration would be targeted for and would be no earlier, than Nov. 2023, NAFCU reported.
According to the Fed, the benefits of using the ISO 20022 format are “increased efficiency due to greater interoperability among global payment systems and types of payments, richer data that could improve anti-money laundering and sanctions screening, and broader adoption of extended remittance information (ERI).”
The notice does clarify that “ERI generally refers to details in the payment message regarding the purpose of a business-to-business payment. For example, a business that sends a payment to a vendor could include details regarding the invoices against which the vendor should apply the payment.”
Pilot Under Way
The Fed announced the launch of the FedNow pilot program in January this year, which will support the development, testing, and adopting of the real-time payment system. Credit unions are among the groups of financial institutions that have been recruited to participate in the pilot.
The Fed said the system will be ready in 2023.