There are three main payment IDs in ISO 20022:
- InstructionIdentification: This is a unique identifier for the payment instruction, as assigned by the ordering party. It is used to track the payment through the system and to resolve any disputes.
- EndToEndIdentification: This is a unique identifier for the end-to-end transaction, as assigned by the ordering party or the beneficiary party. It is used to link the payment to other financial transactions, such as an invoice or a purchase order.
- TransactionIdentification: This is a unique identifier for the payment transaction, as assigned by the payment service provider (PSP). It is used to track the payment through the PSP's system and to resolve any disputes.
The main difference between these three IDs is their scope. The InstructionIdentification is the most general, and it can be used to track the payment through the entire system, from the ordering party to the beneficiary party. The EndToEndIdentification is more specific, and it is used to link the payment to other financial transactions. The TransactionIdentification is the most specific, and it is used to track the payment through the PSP's system.
Here is a table that summarizes the key differences between the three payment IDs:
In the example you provided, the InstructionIdentification and the TransactionIdentification are the same. This is because the payment is being processed by the same PSP. The EndToEndIdentification is different, because it is assigned by the ordering party to link the payment to the invoice.
It is important to note that the use of these payment IDs is not mandatory in ISO 20022. However, it is highly recommended, as it can help to improve the efficiency and accuracy of payment processing.
What is meant by payment service provider (PSP) in ISO20022?
payment service provider (PSP) in ISO 20022 is a third-party financial institution that provides merchants and other businesses with the ability to accept payments from their customers. PSPs offer a range of services, including:
- Payment processing: PSPs process payments from customers on behalf of merchants. This includes accepting payments from a variety of sources, such as credit and debit cards, e-wallets, and bank transfers.
- Fraud prevention: PSPs use a variety of techniques to help merchants prevent fraud, such as address verification and velocity checks.
- Risk management: PSPs help merchants to manage their risk by offering services such as chargeback protection and merchant cash advances.
- Reporting and analytics: PSPs provide merchants with detailed reports and analytics on their sales and payments.
PSPs play an important role in the ISO 20022 ecosystem by providing merchants with a simple and efficient way to accept payments from their customers. PSPs also help to improve the efficiency and accuracy of payment processing by using standardized messaging formats and data structures.
Here are some examples of PSPs that are certified to support ISO 20022:
- Global Payments
- American Express
PSPs are playing a key role in the adoption of ISO 20022, as they are helping to make it easier for merchants to switch to the new standard.