Payments Canada - Lynx ISO 20022 Structured Remittance - A Missed Opportunity?
Payments Canada replacement of its high value payments system (LVTS) with Lynx always seemed to be setting the bar for other infrastructures to aim for, particularly regarding support for structured remittance information which is vital to improve the batching, STP and reconciliation of payables/receivables for corporate payments.
Originally it appeared that the customer to bank message (pain.001) would support up to 100,000 items of structured remittance data per payment - great news as this would cater for the large/mega corporates or aggregators needing to batch thousands of invoices to a payment. With the recent publication of the Lynx ISO 20022 messages, this allowance remains for the pain.001 however the interbank message (pacs.008) now clarifies that Payments Canada is following the limit set by SWIFT CBPR+ of only 9,000 characters (excluding tags).
This tells us 2 things;
- SWIFT's significant influence still sets the standard which payment infrastructures around the world are following for their modernisation programmes and
- the SWIFT CBPR+ standard for structured remittance information has missed a great opportunity for meeting the needs of large corporate/customers. 9,000 characters is no improvement on the MT 103 REMIT (other than this this will not be an additional subscription service/MUG as the MT 103 REMIT is).
Arguably though, since the carriage of structured remittance information is to be bilaterally or multilaterally agreed between the involved parties, many of whom will be limited by their own legacy systems, it is quite likely the 9,000 limit will not be the greatest bottleneck in the end-to-end payment flow. It remains a missed opportunity for what will be the global standard for the next few decades but does open an opportunity for alternative payment channels/technologies to meet this need. To better understand what 9,000 characters means by the way of invoices/remittance items, read my previous article on Supply Chain Improvements with Extended Remittance Information.
Beyond the structured remittance information, the Lynx ISO 20022 specifications now provide lots of valuable information to forge ahead with the necessary, detailed migration planning. For those looking to map and compare MT to MX messages for Lynx (MT 103 to pacs.008 / MT 205* COV to pacs.009 COV), this message companion is particularly useful:
The specification for their ISO 20022 messages can be found here.
*They use MT 205 in the documentation examples as it is the superset message including CORE.