Federal Reserve to Implement New ISO 20022 Funds Wiring System

Due to the Federal Reserve’s imminent shift to a new funds wiring system (known as ISO 20022), if you have upcoming plans to transfer any amount of funds via wire transfer, confirm with your bank and anyone else handling your funds that they are prepared for the shift to ISO 20022 and can accommodate your wire on the planned date of transfer.

On July 14, 2025, the Federal Reserve plans to implement a new funds wiring and messaging format, ISO 20022, to modernize both domestic and cross-border wire transfers. After three years of development and trials, the Federal Reserve will sunset its existing wiring system, the Fedwire Application Interface Manual (FAIM), which is currently used nationwide by banks, escrow services, and other funds exchange operations to facilitate wiring of funds from one party to another. “ISO” refers to the International Organization for Standardization, and the change to ISO 20022 will align the Federal Reserve wire transfer system with those used in other payments markets, including those of key U.S. trading partners. The ISO 20022 system allows for more detailed information to be included with a wire transfer, which is expected to improve efficiencies in related wire transfer processes and result in faster and more reliable payments. The upgrade should be welcome news to anyone regularly involved in closing transactions that involve the wiring of funds, as the existing FAIM system has been known to cause some consternation due to its lack of transparency and predictability (e.g., the anxiety-ridden waiting period from funds wiring to receipt by the escrow service for a same-day transaction closing).

The ISO 20022 system underwent customer testing from March to June 2025 (in which ISO 20022 was actually used for certain planned wire transfers in commercial settings), while testing of the system’s online portal interface has been ongoing since March 2023. However, each FAIM user is responsible for developing its own preparedness and contingency plans in connection with the phase-out of FAIM and the implementation of ISO 20022, so there may be some variance among institutions in the smoothness and efficiency of the transition. If you have upcoming plans to transfer any amount of funds via wire transfer, particularly if a large sum, you should confirm with your bank and anyone else handling your funds as to whether they are prepared for the shift to the ISO 20022 system and can accommodate your wire on the planned date of transfer. You should also be prepared for the possibility of wires being delayed due to transitional complications. If possible, it may be prudent to wire funds in advance of any upcoming closings or be prepared to extend or delay a closing date for a few days.

As always, we encourage you to reach out to us with any questions on this topic or as may be needed in connection with any specific projects.

Sources:

https://www.frbservices.org/resources/financial-services/wires/iso-20022-implementation-center
https://www.frbservices.org/news/communications/061825-fedwire-iso-go
https://www.frbservices.org/resources/financial-services/wires/iso-20022-implementation-center/fedwire-iso-20022-testing-requirements-key-milestones
https://www.frbservices.org/resources/financial-services/wires/faq/iso-20022
https://www.jpmorgan.com/insights/payments/payments-optimization/iso-20022-migration