The Bank of England has today launched a six-week consultation on the adoption of a common global ‘language’ or messaging standard, known as ISO 20022, for payments in the UK.

In conjunction with the New Payments System Operator (NPSO) and the Payment System Regulator (PSR), the study suggests that this standard will be adopted across CHAPS, Faster Payments and Bacs, the UK’s three main interbank payments systems, which together process over eight billion payments per year, with a total value of over £90 trillion.

The message has also been designed to be compatible with the overseas payment systems that are adopting the ISO 20022 global standard. This change is being enabled by the planned delivery of two major UK payment infrastructures, a renewed Real Time Gross Settlement (RTGS) for CHAPS payments, and the New Payments Architecture (NPA) for Bacs and Faster Payments.

Andrew Hauser, executive director at the Bank of England said that the coordinated adoption of a single standard across UK payment systems should bring many benefits for payment providers. “Risk will be reduced by allowing payments to be rerouted more effectively between systems, and by standardising and improving data supporting detection of fraud and financial crime,” he added.

Implementing ISO 20022 will enrich the data carried in payments messages, improve compatibility across technology platforms and create opportunities for collaboration and innovation, according to the central bank. However, to realise these benefits payment providers and system users have to make material changes.

The Bank of England noted that it is not expecting to migrate CHAPS payments to ISO 20022 until 2021 at the earliest.

Meanwhile, the Emerging Payments Association (EPA) has called on the UK government to help develop an environment that fosters investment for innovations in the sector and to seed the subsequent waves of digital payments services.

In its response to the Treasury’s call for evidence on cash and digital payments in the new economy, the EPA also highlighted the importance of a continued focus on financially including all user groups and stated that the payments industry needs to engage customers who are not using digital payments to ensure that the benefits are spread fairly across society.

The response detailed the FinTech community’s position on cash, noting that there is a long-term need for physical currency, but suggesting government and regulators need to do more to deliver appropriate security measures for cash payments – equivalent to the demands for security for digital payments.

“We’re entering the most exciting phase in the evolution of payments,” said Tony Craddock, the EPA’s director general. “The stars are aligned for the UK to show the world, that with the UK government’s support, everyone moving money can benefit from new payments technology.”

The government’s consultation ran from mid-March to the start of June, aimed at better understanding the role of cash and digital payments in the new economy.

“The call for evidence represents an important step in the discussion about cash and digital payments in the new economy, and how the transition from cash to digital payments impacts on different sectors, different regions and different demographics,” the original documents stated.

“It seeks to gather evidence to inform that debate, by exploring how the government can support digital payments and ensure that the ability to pay by cash is available for those who need it, whilst cracking down on the minority who use cash to evade tax and launder money.”

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