World Wide Payment Harmonization Project

Backgrounder

In September 2003, the following banks joined together to form the International Standards Team (IST) Harmonization Group in the effort to drive a single Core Payment XML “Kernel” that can be used globally by any corporate, irrespective of size and sector and by any servicing bank regardless of location:

• ABN AMRO

• Bank of America

• Citibank

• Deutsche Bank

• HSBC

• JPMorgan Chase

• Nordea

• Standard Chartered

• Wells Fargo

The Core Payments XML Kernel includes the Payment Initiation, Transaction Control and Reconciliation Messages required to execute and track payments.  Included in the core payment are all elements necessary for making a payment or direct debit.  Extended remittance advice messages are not part of the Core Payment Kernel but can be defined by various industry standards bodies and linked to the payment by a unique reference identifier (URI). 

Advice information, working capital management and card payments are not part of the Core Payment Kernel but could be handled by each group, separately or through agreement, as an extension packaged with the core payment.

A Single Core Payment XML Kernel will facilitate Straight Through Processing, reconciliation for Corporates, enhance the transparency of payments and reduce the costs of a host-to-host file delivery implementation.  It is absolutely essential, to be successful, that the application vendor community (ERP's, EAI's and treasury workstations) support this direction and the Kernel itself.  This is an additional goal of our efforts.

IFX, OAGi, SWIFT Standards, and TWIST are tasked with working together to accomplish this objective.  Each of these standardization bodies has developed or is in the process of developing an important XML payment message- reflecting the needs of our customers.  RosettaNet's Payment Milestone Program is equally important and has endorsed our direction toward a Core Payment Kernel across standards. 

The newly formed IST Harmonization Group has set the below payment objectives:

o  Agree upon the business model to be applied to its work.

• Identify and resolve content differences between the messages so a single set of content can be used for the actual payment instruction and the related advice/status messages that go with it. 
• Recommend a common core payment that can be accepted into each of the standards bodies for use.
• Establish a method of interoperability that allows the Core Payment Kernel to have extended or related messages packaged with it.  For example, attaching a remittance advice to the payment instruction.

Bank statements have been included in the mission of the IST Harmonization Group but will defined as a later stage the core payment.  The group intends to make its recommendations, through a joint announcement, by January 2004, allowing for feedback from the RosettaNet Payment Milestone Program on its use of existing XML payment messages.

Each group will be responsible for obtaining approval within its standard's organization for the incorporation of the kernel.  SWIFT Standards will extend its Business Validation Group, adding representation from the IFX, TWIST, OAGi, UN/CEFACT and RosettaNet to validate the work over the broad banking and corporate community.

Publication into each standard, based on the agreement targeted for January 2004, will occur at the earliest appropriate time for that standard.  Therefore there will be agreement and then each standard will publish, separately, the Kernel into its body of standards. 

Although numerous banks are already part of the IST Harmonization Group effort and will be able to provide direct feedback to SWIFT Standards on the banking community requirements for future maintenance of the Kernel, other banks may also decide to participate in the work of IFX, OAGi and TWIST - which have additional representation of the other communities of users.  The future feedback of these communities will be equally important to the future successful use of the Core Payment Kernel.