Hi All,
One of our customer’s bank informed their (bank) going to use Purpose Code in ISO20022. Below is the mail communication information from the bank.
“….we are writing to remind you that from 1 May 2025, the Bank of England (“BoE”) will introduce mandatory enhanced data requirements in the form of Purpose Codes for certain Clearing House Automated Payment System (“CHAPS”) payments. We have now finalized the specifications for CitiConnect and CitiDirect file formats which are attached to this communication.
The mandatory enhanced data requirements applicable from 1 May 2025 are with regards to the use of Purpose Codes for property transactions. However, we strongly encourage Purpose Codes being included for all GBP payments.
These requirements will apply to all in-scope CHAPS payments that you instruct through Citibank N.A., London branch (“Citi”) from 1 May 2025 accordingly. The BoE will be monitoring these payments to ensure adherence….”
Further bank sent below explanation about what is Purpose Code.
What are Purpose Codes?
• Purpose Codes are four letter codes which are carried across the payment chain, providing information to all users in the payments chain to indicate the reason a payment is being made. Purpose Codes are one of the policy areas of enhanced data that can deliver the benefits of the ISO 20022 payment messaging standard.
• The UK Purpose Code list is a subset of the full international External Code Set of all acceptable Purpose Codes, which is part of the ISO 20022 repository. The BoE encourages the use of the UK Purpose Code list for UK-originated CHAPS payments. Purpose Codes from the wider External Code Set should only be used when there is a specific need to send a code with an overseas payment that is not on the UK Purpose Code list.
• Purpose of Payment Code should be provided in the specific field based on initiation channel of the payment. File specifications attached for reference.
In our investigation we found that supplier electronic payment address information there is place to define purpose code. Please see below screenshot.
Could ISO20022 payment format experts in IFS, please explain us how to comply with this requirement??
It’s appreciated you could help us how to setup purpose code in IFS application.
Regards,
MalinG.