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South Africa became one of the first adopters on the continent. International
standards body (ISO) financial messaging standard ISO 20022. SARB expects this standard to be the basis for all high-value payments in reserve currency by 2025.
of International Interbank Financial Telecommunications Association (SWIFT) is driving the movement. ISO20022 To introduce a single message exchange mechanism for payments worldwide. This standard enables higher quality data in payment processing and settlement. SWIFT has set a 2025 deadline by which all users in its network must migrate to this messaging standard.
Increasing regulation, ever-evolving cybersecurity threats, and customer demand for faster and more cost-effective payments are cited as reasons for the decision to adopt international standards. The plan for ISO 20022 is to improve compliance and transparency. Improved customer experience and accelerated harmonization of payment systems are also benefits of this move.
Importantly, this adoption marks the beginning of a shift away from traditional proprietary messaging formats. Swift message type. ISO20022 extensible markup language (XML) is the replacement for this legacy format.
XML is a language and file format for storing, transmitting, and reconstructing information. File formats allow the exchange of more detailed data. Such data includes transfer details, purpose of payment, original transfer source, ultimate beneficiary and additional supplementary data.
The transition plan to ISO 20022 highlights the efforts made to fully update and modernize South Africa’s domestic payments infrastructure. South Africa’s real-time gross settlement (RTGS) system could also improve. The SAMOS (South African Multiple Option Settlement) system is owned by the South African Central Bank, which will start adopting the new standard in September 2022.
SARB now plans to support this change across the Southern African Development Community (SADC). The Regional Economic Community, comprising 16 Member States,
ISO 20022 message standard.eyee ‘settled transaction of immediate System operated by Basis’ (TCIB) BankservAfrica Implemented in August 2021 and used the standard.
The cross-border TCIB system is a low-value payment scheme that enables rapid liquidation of single-credit ‘push’ trades that are settled on a deferred basis.
The scheme is open to all banks and licensed non-banks across SADC. Integration points into other parts of Africa are also possible, including East Africa.
