U.S. MSB Daily News
USMSB.com – The global financial community has completed its migration to ISO 20022 as the mandatory standard for cross-border payments, bringing the long coexistence with legacy SWIFT MT messages to an end as of November 22. Swift now says roughly 97% of cross-border payment traffic is flowing in the new format, with a temporary translation service keeping the remaining MT traffic alive in the background.
For the money services business (MSB) sector, this isn’t just a tech upgrade—it’s a new operating environment.
From cryptic MT to rich, structured data
ISO 20022 sits at the heart of the G20 roadmap to enhance cross-border payments, but its real punch comes from one thing: data. The standard allows far more granular, structured payment information to move between institutions, rather than the squeezed, free-text fields that have long frustrated compliance teams and ops staff.
That richer data is expected to:
- Reduce manual repairs and payment investigations
- Tighten sanctions and AML screening
- Improve customer and correspondent transparency on fees and status
- Lay essential groundwork for future interoperability with CBDCs and tokenized value
For MSB operators juggling cross-border remittances, correspondent relationships, nested accounts, and regulator scrutiny, ISO 20022 is poised to become both a compliance enabler and a competitive differentiator.
Swift’s long game pays off
Swift first publicly committed to ISO 20022 for cross-border payments in 2018, kicking off a multi-year global change program involving banks, market infrastructures, and vendors. A formal “coexistence period” began in March 2023, letting firms run ISO 20022 alongside MT while they retooled their back offices.
That grace period is now over. ISO 20022 is mandatory for all payment instructions on Swift, with MT surviving only via an interim conversion layer. For MSBs and partner banks that waited until late in the game, the translation service may be a lifeline—but also a cost and risk factor they’ll be pushed to eliminate.
Jerome Piens, Chief Operations Officer at Swift, called ISO 20022’s rich, structured data “foundational to the future of payments” and a cornerstone of Swift’s strategy for an instant, frictionless, interoperable, and inclusive global network. He also tied the migration directly to upcoming innovations such as Swift’s global payment scheme for consistent retail experiences and its blockchain-based shared ledger for tokenized value.
Not the finish line—just the launch pad
Market watchers are quick to stress: this is not the end of the ISO 20022 story. It’s the start.
With the infrastructure largely in place, attention is shifting from “are we compliant?” to “how do we monetize and operationalize this data?” For MSBs, that means exploring how ISO 20022 can:
- Turbocharge reconciliation with cleaner remittance information
- Enable more precise fraud and anomaly detection using structured fields
- Support deeper, more automated regulatory and management reporting
- Improve liquidity management and intraday monitoring across corridors
Institutions that simply “lift and shift” old MT content into ISO fields without rethinking their data strategy risk missing much of the value—and falling behind competitors who exploit the richer payload.
What it means for U.S. MSBs
For U.S.-based money transmitters, FX dealers, and digital wallet providers, the new standard has direct implications across:
- Bank partnerships: Correspondent and settlement banks will increasingly expect MSBs to speak ISO 20022 natively, not via patchwork mapping.
- Screening and KYC/KYB: Better-structured originator and beneficiary data can improve matching quality—while also making it harder to justify gaps in information.
- Regulator expectations: As ISO 20022 becomes the norm, supervisors may begin to expect more sophisticated analytics and reporting, leveraging the additional data elements.
- Product innovation: From real-time cross-border payouts to programmable, tokenized value, ISO 20022 reduces friction for new business models tied to digital assets and instant payment schemes.
Swift leans into a data-driven future
Swift has signaled it will keep working with banks and market infrastructures to fine-tune payment flows and help users unlock ISO 20022’s full potential. That includes tools, analytics, and guidance designed to help firms improve data quality, track performance, and build new services on top of the richer message format.
For MSBs, the takeaway is clear:
ISO 20022 isn’t just a new message format—it’s the new language of cross-border value transfer. Those who learn to speak it fluently, and use its data to sharpen compliance, pricing, and customer experience, are likely to gain the upper hand in an increasingly competitive, regulated, and digital-first payments landscape.
U.S. MSB Daily News will continue to track ISO 20022 adoption, enforcement trends, and emerging use cases that matter to the money services business community.
U.S. MSB Daily News
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