Asked and answered: FedNow ISO® 20022 message specifications

The Federal Reserve released the FedNowSM ISO 20022 message specifications, which define the message flows and formats the service will leverage when it goes live in 2023. Since the announcement on March 31, we have received several inquiries about these specifications. Below are answers to some of the most commonly asked questions.

Q. What is ISO 20022 and what role does it play in the FedNow Service?

A. ISO 20022 (pronounced EYE-SO-TWENTY-OH-TWENTY-TWO) is a financial industry messaging standard, which provides a universal language for global systems and networks to communicate with each other.

The ISO 20022 standard is an internationally accepted messaging format that enables rich data exchanges, efficient end-to-end straight-through payments processing and interoperability with other payment systems.

At launch, the FedNow Service will introduce messages to instruct customer credit transfers, requests for payment and interbank liquidity transfers, as well as FedNow system and account reporting messages.

See our What is ISO 20022 and why does it matter? post for an overview of ISO 20022 messages.

Q. Who should download the FedNow ISO 20022 message specifications and how can I access them?

A. Whether you’re responsible for your organization’s FedNow Service integration, preparing to build instant payment products leveraging the FedNow Service, or are a payments processor that will help your clients connect to the FedNow platform, now is the time to familiarize yourself with the FedNow ISO 20022 message specifications.

The Federal Reserve is using the MyStandards® platform to provide access to the FedNow ISO 20022 message specifications and accompanying implementation guide. You can access these on the Federal Reserve Financial Services portal (Off-site) under the FedNow Service. Users will need a MyStandards account, which you can create on the SWIFT website (Off-site). View our step-by-step guide (PDF) for tips on accessing the specifications.

Q. How will the FedNow Service’s use of ISO 20022 support interoperability?

A. We understand the critical role interoperability plays in advancing a nationwide reach of instant payments. Our use of the ISO 20022 standard, which is also used by the RTP® Network, will support routing interoperability, where sending financial institutions that use both services can route payment messages over each service to reach participating receivers.

Q. How were the FedNow ISO 20022 message specifications developed?

A. To gain a holistic  view of what our stakeholders value as it relates to the specifications, we gathered input from industry stakeholders, including the FedNow ISO 20022 Working Group and the FedNow Community, to ensure that our message specs met industry needs and aligned with best practices. We also collaborated with The Clearing House to optimize compatibility between the FedNow Service and the RTP Network, which are likely to have common users across the industry.

Q. What do financial institutions need to know about structured remittance information, such as invoice items?

A. The ISO 20022 standards allow for the transmission of structured remittance information and support inclusion of invoice information like invoice numbers, invoice dates, more granular individual line items, discounts etc. While the discussion to define best practices around the use of the structured remittance information continues, the FedNow Service will allow up to 4,000 characters without restriction. As industry best practice is solidified, we will incorporate that guidance directly into our ISO 20022 message specifications.

Q. What resources will be available to help smaller organizations implement the ISO 20022 specifications?

A. We are in the process of developing ISO 20022 education programs for business and technology specialists along with testing opportunities that will be made available through the MyStandards portal. These programs will help your organization prepare for FedNow Service implementation, whether you are using in-house solutions or an outsourced arrangement with a service provider such as a core processor.

Q. If a financial institution isn’t implementing ISO 20022 messages themselves, how will they participate in the testing phase of the FedNow Service?

A. If your financial institution is planning to use a service provider for the development or integration of its instant payments’ application, you should partner with them to participate in the testing phase and enable end-to-end testing. The FedNow Service will make available a testing portal and tools to configure settings, permissions, connection points and test transactions.

Q. How will FedNow participants know what other financial institutions are participating in the FedNow Service?

A. The FedNow participant file will be sent daily and include all active participants for the service for the coming cycle date. When a new participant joins the service, the Federal Reserve Banks will send a broadcast message to all existing participants who sign up for participant alerts.

Participating financial institutions will also be able to access this information through the FedNow portal.

Learn more

To keep you up to date with the latest FedNow Service updates, we publish a regular “Asked and Answered” blog post that answers customers’ most sought-after questions regarding the service. If you have any topics that you’d like to see covered in this series, please answer the “Was this content helpful?” question below and then tell us what you’d like to hear more about.

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