Aarish Bhesania 27 August 2022

Payment Standards & Message Types

✦ When two or more financial institutions wants to communicate with each other & send money
from one end to another both should agree upon a common message standard so both of them
understand each other.
✦ In simple words , when two people want to communicate/talk , both should know a common
language only then they can understand each other & communicate/talk.
✦ Same way financial institutions should agree upon a common messaging standard so they can
communicate with each other and understand each other’s message for transferring funds.
✦Major payment standards in the World.
๏ ISO20022 is an open global standard for financial message transfer, it is granular, rich &
structured , used by SWIFT, common term = MX , E.G. = PAIN.001 , PACS.008, PACS.009.
๏ ISO15022 is an obsolete open global standard for financial message transfer, used by SWIFT,
common term = MT , E.G. = MT101, MT202 , MT103 etc.
๏ ISO8583 is an international standard for financial transaction card originated interchange
messaging, E.G. = x1xx , x2xx , x3xx , x4xx , x5xx.
๏ EDIFACT also know as ISO9735,United Nations/Electronic Data Interchange for
Administration, Commerce and Transport (UN/EDIFACT) is an international standard for
electronic data interchange by UN, generally used in Europe, E.G. = PRICAT, ORDERS
๏ ANSI (X12) American National Standards Institute X12 is a global set of rules for
intercompany electronic data exchange between two EDI Trading Partners E.G. EDI 810 846.

Payment Standards

EDIFACT ISO15022 ISO20022 ISO8583 ANSI(X12)

Know as MT, Used by SWIFT Used in Credit / Debit / ATM card

E.G. MT101, MT103, MT202 etc transactions,
E.G. x1xx , x2xx , x3xx , x4xx

Know as ISO9735, Used in EU,

E.G. PRICAT, ORDERS E.G. EDI 810, EDI 846, EDI
Know as MX, Used by SWIFT 850, EDI 855, EDI 856
E.G. PAIN.001, PACS.008,
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ISO20022 - MX
✦ ISO20022 is the successor of ISO15022, ISO2022 is an open global standard for financial message
transfer, it is granular, rich & structured , used by SWIFT, common term = MX.
✦ ISO 20022, pronounced ‘ISO twenty-oh-two-two’, is an international standard for exchanging
electronic messages between financial institutions.
✦ First introduced in 2004, ISO 20022 was created to give the financial industry a common platform
for developing messages using a set of XML & ASN.1 standards. (XML = Extensible Markup
Language, XML files can be easily validated against XSD (XML Schema Definition is a
recommendation by the World Wide Web Consortium (W3C) to describe and validate the structure
and content of an XML).
✦ In the coming years, banks globally will migrate from legacy SWIFT MT financial messaging to the
highly structured and data-rich ISO 20022 standard.

MX Type

pain.001 Request for Transfer

pacs.008 Single Customer Credit Transfer
pacs.003 Direct Debit and Request for Debit Transfer Message
pacs.009 Financial Institution Transfer for its Own Account
pacs.010 Financial Markets Direct Debit Message
camt 056 Request for Cancellation

✤ PAIN = Payment Initiation Example -

✤ PACS = Payment Clearing and Settlement <Dbtr>
✤ CAMT= Cash Management <Id>7777777</Id><Nm>Aarish Bhesania</Nm>

✤ SESE = Securities settlement <PstlAdr <StrtNm>Mumbai Central</StrtNm>

<TwnNm>Mumbai</TwnNm>
✤ SEMT = Securities management
<Ctry>IN</Ctry> </PstlAdr>
✤ SEEV = Securities events
</Dbtr><DbtrAcct><Id <Othr
✤ ADMIN = Administration
<Id>1234567</Id> </Othr> </Id> </DbtrAcct>
✤ PRXN = Proxy
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ISO15022 - MT
✦ ISO15022 is an obsolete open global standard for financial message transfer, used by SWIFT,
common term = MT
✦ ISO 15022 is the successor of ISO7775 for messaging used in transactions between financial
institutions.
✦ Participants in the financial need a common representation of the financial transactions they
perform and this standard defines general message schema, which in turn are used by
organisations to define messages in a complete and unambiguous way.
✦ ISO 15022 was developed in 1995.

MT Type

MT103 Request for Transfer

MT202 Single Customer Credit Transfer
MT102 Multiple Customer Credit Transfer
MT104 Direct Debit and Request for Debit Transfer Message
MT190 Advice of Charges, Interest and Other Adjustments
MT191 Request for Payment of Charges, Interest and Other
Expenses
MT202 COV General Financial Institution Transfer
MT199 Free format

✦ Building blocks of MT Message Example -

✤ {1:} Basic Header Block :50F:/1234567
✤ {2:} Application Header Block 1/Aarish
✤ {3:} User Header Block 1/Bhesania
✤ {4:-} Text Block
2/Mumbai Central 4a
✤ {5:} Trailer Block
3/IN/Mumbai
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ISO8583
✦ ISO8583 is an international standard for financial transaction card originated interchange
messaging.
✦ It’s widely used for Credit / Debit / ATM card transactions,
✦ ISO 8583 is an international standard for financial transaction card originated interchange
messaging. It is the International Organization for standardisation, standard for systems that
exchange electronic transactions initiated by cardholders using payments card.
✦ ISO 8583 defines a message format and a communication flow so that different systems can
exchange these transaction requests and responses
✦ The vast majority of transactions made when a customer uses a card to make a payment in a
store(POS) use ISO 8583 at some point in the communication chain, as do transactions made at
ATMs.

✦ An ISO 8583 message is made of the following parts:

✤ Message header - Message header is network specific thus Visa and Mastercard use a different
message header structure.
✤ Message Type Identifier (MTI) - Message Type Identifier is one of the key element which
classifies the high level function of the message. A message type indicator includes the ISO
8583 version, the Message Class, the Message Function and the Message Origin.
✤ One or more Bitmaps - The MTI is followed by the bitmap which indicates which elements are
present in the body of the message. A bitmap is an 8-byte binary value (or 16-byte hexadecimal
string) indicating the presence or absence of the data elements in the body of the message.
✤ Data elements, or fields - Mode of data encoding varies from field to field.There are up to 192
data elements, the message can have a maximum of three bitmaps. Most of the data elements
have a specific purpose in the standard, there are some data elements which are general purpose
and their use varies from implementation to implementation.

The following example

(MTI 0200) defines a
Financial Transaction
Request Message.

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EDIFACT
✦ EDIFACT also know as ISO9735,United Nations/Electronic Data Interchange for
Administration, Commerce and Transport (UN/EDIFACT) is an international standard for
electronic data interchange by UN, generally used in Europe.
✦ It was developed for the United Nations and approved and published by UNECE, the UN
Economic Commission for Europe.
✦ In 1987 EDIFACT / ISO9735 were approved by International organisations of standards(ISO)
✦ The work of maintenance and further development of this standard is done through the United
Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) under the UN
Economic Commission for Europe, in the Finance Domain working group UN/CEFACT TBG5.
✦ EDIFACT has a hierarchical structure where the top level is referred to as an interchange and
lower levels contain multiple messages which consist of segments, which in turn consist of
composites. The final iteration is an element which is derived from the United Nations Trade Data
Element Directory (UNTDED); these are normalized throughout the EDIFACT standard.

✦ The EDIFACT standard provides:

✤ A set of syntax rules to structure data
✤ An interactive exchange protocol (I-EDI)
✤ Standard messages which allow multi-country and multi-industry exchange

Document type De nition

AUTHOR Authorization message
BALANC Balance message
BANSTA Banking status message
BOPBNK Bank transactions and portfolio transactions report
message
BOPCUS Balance of payment customer transaction report
message
BOPINF Balance of payment information from customer
message
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ANSI ASC X12

✦ ANSI (X12) American National Standards Institute X12 is a global set of rules for intercompany
electronic data exchange between two EDI Trading Partners.
✦ The Accredited Standards Committee X12 (also known as ASC X12) is a standards organisation .
Chartered by the American national standard institute (ANSI) in 1979, it develops and maintains
the X12 Electronic Data interchange (EDI) and Context Inspired Component Architecture
(CICA) standards along with XML schemas which drive business processes globally.
✦ ANSI (X12) is used in Finance , Supply chain , health care systems .

✦ ASC X12 divided in the following:

✤ X12C - Communications & Controls
✤ X12F - Finance
✤ X12I - Transportation
✤ X12J - Technical Assessment
✤ X12M - Supply Chain
✤ X12N - Insurance

Type De nition
EDI 820 Payment order (EFT)
EDI 810 Invoice
EDI 830 Delivery forecast
EDI 832 Price/sales catalogue
EDI 850 Purchase order
EDI 997 Functional Acknowledgement

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The End.
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