Enhancing the way we pay: How ISO 20022 is transforming payments
A version of this article was published on Trade Finance Global on April 30
By: Karl Lee, Lead, ISO 20022 Centre of Excellence, Payments Canada
Karl leads the efforts to evolve ISO 20022 for payments in Canada, supporting member financial institutions in delivering smooth, frictionless payments domestically and globally. He also contributes to international ISO 20022 initiatives, helping shape the ongoing evolution of the standard.
Have you ever looked at your bank statement and wondered what a certain payment was for? If so, you’re not alone.
Traditional electronic payments often only include basic information, like the amount and date, leaving little insight into what the payment was actually for. This lack of detail creates friction for everyone, from individuals managing personal finances to businesses trying to reconcile payments with invoices.
Enter ISO 20022, the global financial messaging standard that’s set to transform the way we pay by providing richer, more structured data with every transaction. By embedding detailed remittance information, ISO 20022 makes payments more transparent, efficient and useful, not just for financial institutions but for businesses of all sizes and their customers.
Payments Canada leads the adoption of ISO 20022 in Canada by offering resources, education, training and operational support for Canada’s financial ecosystem. We also manage ISO 20022 usage guidelines for our payment systems in alignment with global standards.
As a part of its leadership in the ISO 20022 journey, Payments Canada has published updated ISO 20022 message specifications for use on Lynx, Canada's high-value payment system, which were published alongside a companion document to help financial institutions prepare for changes coming in November 2025. These revised guidelines introduce enhancements, including a new hybrid postal address format developed by Swift’s Payment Market Practice Group (PMPG).
This hybrid approach combines structured address elements, such as country and town name, with unstructured fields like address lines. It’s a practical bridge that enables organizations to start transitioning toward structured data without requiring an immediate change. Structured address formats will improve accuracy, reduce errors and support critical processes like anti-money laundering (AML) monitoring.
Another important update is the global shift from legacy MT messages to the modern MX format, which uses XML-based messaging. As of November 2025, the coexistence period of these two message types will end, meaning some MT messages will no longer be supported. Financial institutions, payment service providers and their technology partners are strongly encouraged to prepare for this transition by updating their systems and reviewing how the changes may impact their operations.
These developments are more than just technical upgrades, they are transformational shifts in how we move money. By embedding actionable data into every transaction, ISO 20022 will pave the way for smarter, faster and more secure payments and processes, while aligning Canada’s financial ecosystem with global standards.
As more countries and institutions adopt ISO 20022, its benefits domestically and globally will compound. This will mean better cross-border transactions, fewer errors and more opportunities to innovate with new services that will benefit businesses and consumers.
ISO 20022 is more than just a standard, it’s a catalyst for change. With richer, structured information sent with every payment, it has the potential to enhance the way we pay, do business and understand our financial lives. It’s a leap forward to a more transparent, efficient and data-driven future.
To learn more about ISO 20022 and how Payments Canada supports its adoption, visit our website and explore our growing library of educational materials.
You can also join me and over 1,900 payment leaders and innovators at The Payments Canada SUMMIT, happening May 6 to 8 in Toronto. Use promo code SUMM25PCVIP to save $100 off your event pass.
During The SUMMIT, delegates are invited to visit the Payments Canada demo booth in the exhibit hall for an exclusive Ask Me Anything (AMA) session with Karl Lee, focused on the ISO 20022 financial messaging standard. These AMA sessions will take place on:
- Tuesday, May 6, from 9:30 AM to 10:00 AM and 12:45 PM to 1:30 PM
- Wednesday, May 7, from 12:15 PM to 12:45 PM
