As Fed Adopts ISO 20022, Why the New Financial Messaging Standard Matters
The standard is set to create a far more robust and flexible payments system.
The standard is set to create a far more robust and flexible payments system.
Business leaders may have heard the term “ISO 20022” in relation to the payments industry in recent years, particularly with the Federal Reserve adopting the financial messaging standard on July 14, 2025. The following is a high-level breakdown of what the standard does and how it impacts U.S. businesses.
ISO 20022 is a messaging standard that creates a worldwide common language for payment instructions and information reporting. In response to inconsistent payment messaging formats used by global financial institutions, the standard calls for a set of detailed and uniform information fields using the Extensible Markup Language (XML) format. Eventually, all communication networks will be on the standard, ultimately leading to enhanced operational efficiencies and improved reconciliation processes.
The Federal Reserve’s funds transfer system, Fedwire, is adopting the ISO 20022 messaging standard with a single-day implementation on July 14, 2025, which will sunset the existing proprietary Fedwire Application Interface Manual (FAIM) format and replace it with messages complying with ISO 20022. All financial institutions using the Fedwire system must be able to send and receive messages using the ISO 20022 format on July 14.
For most businesses that frequently perform wire transactions, ISO 20022’s impact will be largely invisible. The important piece to know is that the standard is set to create a far more robust and flexible payments system with great potential to improve operations for financial institutions and the businesses they serve, even as it occurs behind-the-scenes.
Wire transfers are vital to the U.S. financial system, and ISO 20022 should bring many benefits for transfers, including speed and reliability. In keeping with modern industry standards and the Company goal to provide clients convenient, accessible banking services, FNB has diligently updated its processes to be ready for Fedwire’s implementation and all other instances where ISO 20022 is required.
The Federal Reserve has a detailed FAQ here
, largely related to implementation by financial institutions. To lean how the standard is impacting international transactions, check out this Knowledge Center article, “ISO 20022: How the Next Era of Cross-Border Payments Will Benefit Businesses.”
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