The Federal Reserve banks and The Clearing House Payments Co. LLC plan to decide by June how to incorporate remittance information into wire transfers.
Executives of the two organizations said last week that they were leaning, at least as an interim step, toward a domestic standard known as the EPN STP 820 format. A stripped-down version of the electronic data interchange file format, EPN STP 820 has been available for automated clearing house remittances since November 2004.
However, the organizations plan to continue to talk with the European Central Bank, major European financial companies, and the Society for Worldwide Interbank Financial Telecommunication and could eventually shift to a standard known as ISO 20022. European banks and corporations are implementing ISO 20022 in conjunction with the the Single European Payment Area project, which is scheduled to go live in January.
During a presentation at the Nacha Payments 2007 conference in Chicago, Ken Isaacson, an assistant vice president at the Federal Reserve Bank of New York, said the New York Fed could get the EPN format into production faster.
"We don't see it as possible for the Fed to implement ISO for the next several years," Mr. Isaacson said. There are "other things on the critical path."
Henry C. Farrar, the Clearing House senior vice president who oversees the Clearing House Interbank Payments System, which handles high-value money transfers, said his organization could move more quickly than the Fed, because Chips messages have an unused field for remittance details. But he said it is important for the industry to work collaboratively as well as swiftly.
"The banks have told us they want something that's common," Mr. Farrar said. "They don't want to wait seven years for a solution."
