The coexistence period between MT and ISO 20022 message standards is coming to an end this weekend, as the Society for Worldwide Interbank Financial Telecommunication (SWIFT) 22 November deadline closes in.
Starting Saturday, SWIFT requires all financial institutional–to–institutional payment instruction messages to move exclusively to the ISO 20022 format, closing a transition window that has been open since 2023.
ISO 20022 supports several payment and settlement processes, including cross-border wire transfers and securities transactions. It has also gained traction within blockchain-based financial networks that would like to open doors to traditional institutions and international payment services.
Crypto, banking industries prepare for cutover
In an update to remind institutions of Saturday’s deadline on X, SWIFT posted that FIN and FINplus users are advised not to send any messages between Saturday at 15:00 GMT and Sunday at 05:00 GMT.
“Check Swift Knowledge Base for full details, troubleshooting guides, and contingency processing information,” the organization wrote.
As Cryptopolitan reported two weeks ago, more than 70 countries, including Canada, Japan, and those in the Eurozone, have already processed payments using the new standard.
The United States, one of the last major jurisdictions to complete the shift, implemented ISO 20022 in its Fedwire Funds Service on July 14. Fedwire processes roughly $4.7 trillion in payments daily, and with President Trump’s pro-crypto policies, we could see an addition of ISO 20022-compliant coins added in Fed-related transactions.
There are currently 9 coins deemed compliant with the upcoming standard, including Ripple’s XRP, Stellar’s XLM, Hedera’s HBAR, IOTA, ALGO, QNT, and XDC. Their inclusion in ISO 20022-compliant lists could see them feature in banking and government payment systems.
Compliance allows these assets to transmit structured data compatible with banking requirements, increasing their chances of consideration in centralized payment frameworks or digital reserve currency discussions.
SWIFT has conducted tests connecting its ISO 20022 framework to networks like Ripple, which has been trialed for interbank settlements and central bank digital currency payments, while Stellar has been tested in cross-border transfers and stablecoin transactions.
New standard to reduce payment failures and losses
One of the main reasons SWIFT has cited for the global migration is ISO 20022’s potential to reduce payment failures, an issue seen in both banking services and crypto payments.
According to a recent report by Datos Insights, one-third of surveyed banks said between 1% and 3% of domestic payments incur charges from partners due to failures. Another 24% reported that 4% to 5% of domestic payments incur such charges, while 11% said failure rates reach 6% to 8%.
The survey also mentioned that 23% of banks said between 12% and 15% of their cross-border transactions incur charges linked to payment failure. Another 18% reported that failure-related charges occur more than 25% of the time due to missing data, formatting discrepancies, or incomplete compliance information.
Gareth Lodge, a senior analyst at Celent, stated that ISO 20022 could significantly help address these financial issues in both industries.
“The standard makes it much clearer what data goes in what field, improving the data. It mandates how address fields work, giving significant improvements in sanctions, AML, and KYC scanning,” Lodge said in an interview with the American Banker.
Blockchain networks and banks still behind schedule
While the benefits of ISO 20022 have been acknowledged by financial institutions, banks, and crypto businesses may be struggling to migrate to the new standard as the final deadline arrives.
“There is a disconnect between what ISO 20022 requires and what some of the banks’ systems support,” said Datos Insights advisor Robin LoGiudice in a recent interview.
She explained that even if a payment system can store ISO 20022 data, other internal systems, like customer reporting tools, must also be able to accept the new information. Without those updates, straight-through processing rates could fall, forcing institutions to manually process transactions that should be automated.
Grant Harper, financial services managing director at ITRS, said in an email that replacing decade-old legacy infrastructure could harm a bank’s operations. “Any time you touch core systems, the risk of disruption increases,” he reckoned.
