All retail payment systems are now required to adopt the global standard ISO 20022 for a more efficient and seamless process for domestic and cross-border retail payments, based on a circular issued by the Bangko Sentral ng Pilipinas (BSP).

According to BSP Circular 1223, approved by the policy-making Monetary Board on Nov. 6, harmonization with the global standards is in line with Sec. 7 of Republic Act (RA) 11127, or the National Payment Systems Act, and Sec. 102 of the Adoption of the Principles for Financial Market infrastructure.

The circular gives participants two years, from the effectivity of the issuance, “to achieve full compliance through a phased implementation, with at least one use-case harmonized with the first year from the effectivity of this circular,” which is 15 calendar days after publication in a newspaper of general circulation or the Official Gazette.

An ISO 20022 Harmonization Industry Project Team has been formed to help industry players in implementing the new rule.

The BSP, in a press release Wednesday, said the new rule is based on the guidelines set by the Bank for International Settlements – Committee on Payments and Market Infrastructures.”

“This supports better transaction monitoring, stronger compliance checks, and effective consumer redress,” it said.

It explained that regulated financial institutions using InstaPay and PESONet, the two electronic fund transfer services under the central bank’s National Retail Payment System, “have already adopted ISO 20022, but implementation has been inconsistent.”

“With the issuance of Circular No. 1223, industry players are now required to consistently practice the global standard,” it said. “The circular also aligns with the G20’s objectives to improve affordability, speed, and transparency of remittances, as well as domestic and cross-border retail payments.”