BSP orders ISO 20022 adoption for payment systems

The Bangko Sentral ng Pilipinas (BSP) has mandated that all retail payment systems in the country adopt the ISO 20022 standard to enhance the efficiency, safety, and interoperability of domestic and cross-border retail payments.

The new regulation is outlined in BSP Circular No. 1223 and aligns with global standards set by the Bank for International Settlements–Committee on Payments and Market Infrastructures (BIS–CPMI).

It aims to enhance transaction monitoring, streamline compliance procedures, and ensure effective consumer redress.

ISO 20022, developed by the International Organization for Standardization (ISO), governs electronic data interchange between financial institutions, promoting structured, detailed, and machine-readable payment information.

While existing systems such as InstaPay and PESONet have already adopted ISO 20022 in part, the BSP observed inconsistencies in implementation.

Circular No. 1223 now requires all participants to apply the standard across all retail payment operations uniformly.

The initiative supports the G20’s goals of improving the speed, affordability, and transparency of domestic and cross-border payments, particularly remittances.

Under the circular, a two-year phased implementation period has been granted to allow financial institutions and payment service providers to fully comply with the ISO 20022 requirements.

According to the BSP, consumers can expect more seamless transactions and faster resolution of inquiries, as ISO 20022 enables payments to carry complete, standardized data.

For businesses, the standard allows more accurate invoice reconciliation, reduces manual processing, and facilitates integration with international systems.

Financial institutions will benefit from simplified regulatory reporting, improved risk monitoring, better customer data analysis, and enhanced compatibility with global payment networks.

To guide the industry through this transition, the BSP has established the ISO 20022 Harmonization Industry Project Team.

This team will lead coordination efforts and ensure industry-wide preparedness throughout the implementation phase.

The BSP said it will closely collaborate with industry stakeholders to ensure a smooth and timely rollout of the standard.