Standards: The Pony Express to E-Payments (Part II)

January 11, 2007


San Francisco, CA, USA January 11, 2007

Standards: The Pony Express to E-Payments

Standards and the critical mass of users they generate are the pony express of any adoption curve. Development and dissemination of standards for B2B transactions will open the e-payments frontiers. Although they will not generate a gold rush, they will enable electronic payment processes.

In a new report, Standards: The Pony Express to e-Payments, Celent discusses advances made in developing payment-related standards. Although standards ultimately generate a win-win for all stakeholders, there are short-run costs and contentions that result in an arduous journey. Paving the path to e-payment standards has not been any different, and it is not completed yet (e.g., ISO20022, Figure 1). Much of the contention revolves around control: control over standards development and loss of control when proprietary systems are replaced with open ones. Global corporations, which stand to gain the most, are already beginning to generate a demand pull that banks and other third parties will respond to. "Corporations are speaking up. They want improved and innovative transaction-related services, for example, straight-through processing rates above 95%, which require wlectronification of the payment process," comments Alenka Grealish, author of the report and manager of the Banking group at Celent.

"XML-based messaging standards will act as the pony express, while the Internet and Internet protocols will be the communication paths they beat. Large companies are increasingly favoring XML. An EDI fatigue has set in to several global corporations and is triggering a gradual migration from EDI-based systems to XML-based ones," says Grealish.

"ISO20022 will be the standards pony that first rides in Europe and is promoted by global banks and corporations. Leading ERP vendors are incorporating it into their next releases, and will assure its promulgation over the next three to five years it takes large corporations to upgrade," Grealish concludes. The report reviews the accomplishments and ambitions of SWIFT (including SCORE), TWIST, and The Clearing House. In addition, it provides an overview of the migration from EDI connectivity to SWIFTNet of a corporate pioneer, GE.

The report is 27 pages and contains eight figures and seven tables.

A table of contents is available online.

Members of Celent's Wholesale Banking research services can download the report electronically by clicking on the icon to the left. Non-members should contact for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

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Michele Pace
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Yumi Nagaoka
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Table of Contents

San Francisco, CA, USA January 11, 2007

Standards: The Pony Express to E-Payments

Executive Summary 3
Overview 5
XML in Ascendancy 7
  Lead Pony: ISO20022 8
Consortia Blazing Trails 11
  Twist Crossing Mountains 12
  SWIFT "Scores" 14
  The Clearing House Initiatives 21
Future Trends 24
Objectivity and Methodology 26

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