This week there was big news in the payments space.
Yesterday, we learned that CHIPS (Clearing House Interbank Payment System) migrated to the ISO 20022 message format. The ISO 20022 standard is a global standard that is being adopted (slowly) by payments schemes across the globe. The standard actually dates back to 2004 – changes often don’t happen quickly in finance.
For those of us who are not payments nerds let’s explain what that means. This new standard uses a data-rich common language (using XML syntax) that can be exchanged between banking systems and corporations. It is vital for instant payments as both RTP and FedNow have used this new standard since inception.
CHIPS is the engine supporting global trade so this migration will lead to extended hours for cross-border payments activity. It will eventually lead to a movement away from a batch-based payments system to a 24/7 instant payments system globally.
The first day of CHIPS saw significant uptake, as 555,345 payments, worth $1.81 trillion, were logged with the new format.
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