Estimated reading time: 4 minutes
In the ever-revolving landscape of trade payments, a notable trend is gaining momentum as the global financial industry embraces ISO 20022 – a data-rich and interoperable universal messaging format set to replace the legacy Message Text (MT) that has prevailed for years.
Although ISO 20022’s MX format was introduced by the International Organization for Standardisation in 2004 and has already gained traction in over 70 countries, the impetus for its widespread adoption has been reignited among financial industry leaders. The renewed urgency stems from the imminent November 2025 deadline when The Society for Worldwide Interbank Funds Transfer (SWIFT) plans to decommission the MT format.
With the advent of ISO 20022, a new era of increased efficiency and digitisation for trade payments has dawned. This shift sparked the proliferation of innovative fintech companies seeking to support the industry’s continuous quest to redefine and harness the full potential of ISO 20022 to efficiently execute trade payments particularly cross-border transactions.
Among the innovators in the field, Impel distinguishes itself as a blockchain-based organization dedicated to expanding the possibilities of ISO 20022 beyond its conventional messaging capabilities. Through the strategic implementation of Application Programming Interfaces (APIs) and digital assets, Impel offers features such as real-time settlement and continuous accessibility throughout the year.
Enhancing efficiency through ISO 20022 messages
The industry is witnessing an increasing shift towards ISO 20022 adoption, with financial institutions and corporate treasurers recognising its potential to streamline trade payment operations.
One of the significant advantages of ISO 20022 messages lies in their ability to carry a wealth of granular data on invoices, facilitating financing processes and enabling banks to embrace straight-through processing (STP).
These messages have the potential to transmit specific information sets required for processing transactions, allowing for streamlined operations. By adopting ISO 20022, banks can optimise their workflows, reducing manual errors, and eliminating the need for tedious reconciliation processes.
Driving digitisation in trade transactions
ISO 20022 represents a pivotal step towards the digital transformation of trade transactions. The structured nature of ISO 20022 messages enables the inclusion of multiple data elements from invoices, facilitating seamless information exchange among trade participants.
This standardised format empowers next-generation enterprise resource planning (ERP) platforms to process transactions using ISO 20022, driving higher levels of automation. By automatically analysing ISO 20022 messages and status updates, these platforms can further streamline processes and eliminate manual intervention.
Case Study: Impel Bringing ISO 20022 API with Instant Settlement
Impel’s technology shows how ISO 20022 is driving transformative changes in the trade payment landscape.
As a solution provider built on the XDC Network, a public blockchain powered by XDPoS consensus algorithm, Impel’s API has the ability to act as a seamless, secure and cost-effective payment rail for trade transactions with minimal network gas fees, typically around $0.00001. Transactions can be executed individually or consolidated into a single financial message with multiple embedded transactions.
The API also encompasses all 733 data definition messaging types including backward compatibility with over 1,800 older versions. Moreover, the solution treats security as paramount by incorporating a propriety Layer 2 security module, ensuring financial messages are safely transmitted, and sensitive data are safeguarded against unauthorised parties. Notably, all validating Masternodes within the XDC Network are Know Your Customer (KYC) compliant, which is an exceptional feature among public blockchains.
The technology is a peer-to-peer instant settlement via the use of digital assets – which can elevate the way trade transactions are executed, particularly between cross-border parties. Via a strategic partnership with Fluent Finance, the founder of the flagship USPlus stablecoin, a digital asset pegged to the USD and backed by a consortium of federated banking partners, Impel is able to offer institutions the option of settling transactions instantly around the clock.
The rise of ISO 20022 heralds a new era in trade payments, characterised by enhanced efficiency, digitisation, and automation. Financial institutions are embracing this standardised messaging framework to unlock the vast potential.
As the industry increasingly adopts ISO 20022, solutions such as Impel’s API, in collaboration with Fluent Finance’s digital assets and the XDC Network, demonstrate the potential for heightened automation and efficiency in trade payments. These advancements facilitate the digitization of trade transactions, enabling ERP platforms to process and analyze ISO 20022 messages and status updates with greater precision.
