ISO 20022 Migration for the Australian Payments System –
Responses and Options Paper – September 2019
2. Project Scope

2.1 Summary of responses

2.1.1 HVCS

Most respondents support maintaining a dedicated HVCS for the foreseeable future and upgrading it to use ISO 20022 messaging rather than trying to move high value payments onto the NPP platform. There was a general recognition of the issues raised in the Issues Paper and the challenges these presented.

Nevertheless, a few respondents felt there was merit in further exploring whether it would be of net benefit to the industry to move HVCS payments into the NPP. These respondents saw some potential advantages in consolidating their internal payments systems and some possible efficiency benefits in maintaining and developing a single industry infrastructure rather than two. They also felt that resiliency concerns could be addressed by design improvements and that the suggested consolidation would help to concentrate ongoing investments.

Box A considers the implications of the HVCS being migrated to using NPP infrastructure, using the APC's four desirable characteristics of an effective payment system[2]: resilience, efficiency, accessibility and adaptability. This assessment suggests that there is a strong case for retaining a standalone HVCS.

Box A: Consolidation of HVCS into the NPP

This analysis assumes that HVCS payments would continue to settle in RITS using the liquidity management processes and cash market access arrangements currently available to Exchange Settlement Account (ESA) holders. The RBA's existing ESA Policy would continue to apply.[3] Existing HVCS settlement hours would be maintained to align with cash market requirements.


If the industry expectation that DE payments migrate to the NPP over time is realised, then the additional migration of HVCS payments to the NPP would effectively consolidate the three existing credit transfer systems into using a single platform. This would reduce the options available to participants for responding to a contingency event (e.g. redirecting some payments from one system to the other) potentially reducing overall payments system resilience. There would also be an increased likelihood of ‘systemically important’ HVCS payments being impacted by a participant issue, as the same infrastructure is also being used for higher volume retail payments.

The separation of retail and wholesale payments systems reduces operational risk and the potential to affect financial stability. It is consistent with the approach adopted by other major market infrastructures around the world.


Some respondents suggested that making HVCS payments using the NPP platform has the potential to improve efficiency by making greater use of NPP's connectivity and infrastructure arrangements, leveraging associated back office system upgrade processes, and reusing the existing NPP ISO 20022 message suite. However, these benefits are limited to HVCS participants already connected to the NPP; existing HVCS participants would incur additional costs in standing up and maintaining the systems required to join and connect to the NPP. Systems and processes for treasury management of ESA liquidity would continue to be required by participants as now. Separate HVCS and NPP rule books would still need to be maintained and administered reflecting the very distinct nature of the two systems and lessening the case that HVCS payments would be more efficient using the NPP platform. There would also be limited scope for internal systems to be decommissioned given that most HVCS members will still need to retain their SWIFT infrastructure to access the global SWIFT network. Messaging costs may fall for some participants that are not currently on fixed fee arrangements with SWIFT, while for others, reduced volumes may bring them below the fixed fee cap and result in an increase in average message costs. The process for determining settlement fees would continue largely unchanged, as the RBA would continue to recover the cost of operating RITS and FSS.

The RBA and APC believe there is scope to achieve back office processing efficiencies for high value payments by adopting the suite of ISO 20022 investigation, dispute resolution and reconciliation messages (as used by NPP) as part of a HVCS ISO 20022 migration.


The NPP operates on a dedicated domestic network, and HVCS operates on the global SWIFT network. The membership base of NPP is quite different to that of the HVCS: currently 32 of the existing 48 HVCS members do not have access to the NPP. More than half of HVCS members are overseas-based institutions, many of whom operate global infrastructure offshore and a move to using the domestic NPP network would have potentially significant implications for these institutions. Under the existing RBA tiering arrangements set out in the ESA Policy, at least 17 HVCS members have large enough payment value flows to require them to join NPP as an NPP Full Participant or an NPP Settlement Participant. The costs of building new NPP capable systems for these organisations is likely to be sizeable.


The existing NPP infrastructure is not a perfect substitute for the HVCS given its distinct characteristics and service offerings. Some of the differences between NPP and HVCS include: hours of operation; payment volumes/values; access/participation requirements; procedures/rules; and settlement processing arrangements. There may be implications for the NPP's design to ensure it can accommodate all of the different service arrangements specific to HVCS. In comparison to the HVCS, there is likely to be a need for NPP to be more adaptable and innovative over time, in order for it to respond to changing retail payments system needs. The inclusion of HVCS on the NPP platform may result in additional complexity and could impede this innovation. There may also need to be a reassessment of the underlying technology used for the NPP as a result of the increased level of direct participation required. SWIFT advises that current NPP design and systems have been sized for 50 directly connected participants.

2.1.2 Other payments system messaging

There was little support for migrating DE payments to ISO 20022, with many respondents recognising that the cost and effort of migrating legacy DE arrangements to ISO 20022 messaging would be large and the migration might not be worthwhile. Many respondents noted that they expect DE payments to move to the NPP in the longer term and some noted that a number of DE credit payments are already being made through the NPP. The main impediments cited that currently prevent DE payments migrating are that NPP account reach is currently less than DE and that there is currently not a debit product available in the NPP. A small number of respondents felt that there were significant benefits associated with the ability to complete retail payments in a batch. NPP Australia (NPPA) and its Participants are currently considering a range of initiatives that could support the ingestion of batch payments into the NPP.[4]

Similarly, respondents did not express any support for the migration of electronic cheque clearings to ISO 20022, noting the rapid decline in cheque use.[5]

There was no support for migrating BPAY and card clearing messages to ISO 20022. There was also no industry support for migrating the settlement of these payments via RITS Low Value Settlement Service (LVSS) messaging to ISO 20022.

There was general support from respondents for the industry to develop message usage guidelines for ‘customer to Financial Institution (FI) and FI to customer’ messaging (Figure 2). However, a number of responses indicated that these standards should not be mandated. They felt that the key benefit of developing these standards was to improve the overall end-to-end experience for customers and the adoption of the standard should be at the discretion of each financial institution and be driven by customer requirements and competitive pressures.

Figure 2
Figure 2: Other Messages to Migrate

Many respondents, particularly those who participate in the NPP, felt that significant back office processing efficiencies could be achieved by adopting a range of investigation, dispute resolution, and reconciliation messages (which are already defined for NPP in an ISO 20022 format) for high value payments.

Some respondents also expressed a desire to clarify and, if possible, standardise reporting requirements and formats with external parties, such as regulatory reporting to Australian Transaction Reports and Analysis Centre (AUSTRAC) under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). Respondents suggested that relevant regulatory parties, such as AUSTRAC, should be involved in developing these requirements, including any transition requirements.[6] Respondents also noted the need for the migration project to be cognisant of Recommendation 16 of the Financial Action Task Force (FATF) Recommendations in relation to wire transfers for domestically processed payments that have originated from overseas.[7]

The majority of respondents supported the continued use of a partial Y-Copy service, where only a subset of message content is received by the RBA for settlement, for the HVCS. Concerns were expressed in relation to the use of the V-Shape model, particularly in relation to the privacy and confidentiality of customer information. SWIFT is finalising the dates when the partial Y-Copy solution for ISO 20022 will be available. Currently it is targeting a minimum of six months for industry testing (from Q1 2021) allowing for a planned go-live in November 2021.

The majority of respondents supported replacing the existing SWIFT Message Type (MT) messages used for the RBA's Automated Information Facility (AIF) with ISO 20022 messages (Figure 3).

Figure 3
Figure 3: AIF Replacement

2.2 Proposed project scope

Based on responses from the industry, on balance, there appears to be sufficient support to define the scope of the ISO 20022 industry migration project to include:

  • the HVCS, which will continue to run as a separate clearing system using the SWIFT InterAct service with settlement occurring in RITS
  • the development and introduction of ISO 20022 reporting, investigation, and reconciliation messages for the HVCS, similar to those used for NPP
  • the use of agreed enhanced content (discussed further in Section 3)
  • the development of appropriate ISO 20022 message usage guidelines for customer to FI and FI to customer messaging (with no compulsion for use)
  • alignment with compliance obligations with regard to FATF and international funds transfer instruction (IFTI) requirements. Additionally, transition arrangements for AUSTRAC reporting during the migration period will need to be considered.

In parallel to the industry ISO 20022 project, the RBA will engage with each of the existing RITS Batch Administrators to plan for migration of batch settlement messaging to ISO 20022.[8] Clearing House Electronic Sub-register System (CHESS) settlement messages are already in the process of being migrated as part of the broader ASX CHESS Replacement project.

It is envisaged that ASX will separately migrate the in-scope SWIFT MT messaging used by its Austraclear system to the equivalent ISO 20022 messaging. This is expected to align to the SWIFT cross-border ISO 20022 migration timelines.

Migration of the RITS AIF service from MT to ISO 20022 messaging will be managed independently from the industry migration project. The RBA will look to ensure that the impact to AIF participants who commence using ISO 20022 in the HVCS is considered (discussed further in Section 4).

Consultation Questions
  1. Does your organisation agree with the proposed project scope, as set out in Section 2.2? If no, please explain your view.
  2. Does your organisation support the introduction of an HVCS suite of investigation, dispute resolution, and reconciliation messages? Should use of these messages be mandatory? Please explain your view.


See ‘Australian Payments Council 2019 Consultation’. Available at [2]

The RBA's ESA Policy (see requires ESA holders to settle directly across their own ESA unless their aggregate wholesale RITS RTGS transactions are less than 0.25 per cent of the total value of wholesale RITS RTGS transactions. [3]

This includes a payment initiation Application Programming Interface (API) with a batch booking indicator as well as ‘debulkers’ which could intelligently convert bulk DE files into individual NPP payments. [4]

A number of responses recommended that an end date for cheque acceptance should be agreed and publicly announced. [5]

The RBA has consulted with AUSTRAC, which is supportive of the broader initiative and welcomes the opportunity to work with the industry. [6]

See [7]

This will exclude property settlement. [8]