RfP API

FedNow and Real-Time Payments (RTP) systems use the ISO 20022 messaging standard for transmitting payment requests and related information in a structured and consistent format. This international standard is widely adopted in payment systems because of its flexibility, scalability, and ability to carry richer data compared to older formats like SWIFT MT messages or NACHA formats.

Here's an overview of the FedNow Instant and RTP Request for Payment (RfP) file format using the ISO 20022 standard, along with how it works for these real-time payment systems.

ISO 20022 Request for Payment (RfP) Format

In ISO 20022, Request for Payment messages are commonly structured using XML. The specific message types are defined within the ISO 20022 standard, and for Request for Payment (RfP), the message type is typically pain.013 and pain.014 for response messages.

• pain.013.001.07 (Request for Payment): Used to initiate a request for payment.
• pain.014.001.07 (Request for Payment Status Report): Used to respond to a request, either accepting or rejecting it.

Key Components of the ISO 20022 RfP Message (pain.013)

Below are some key elements that would be present in an ISO 20022 RfP message:

1. Group Header (GrpHdr): Contains information about the transaction as a whole.
   • Message identification
   • Creation date and time
   • Initiating party
2. Payment Information (PmtInf):
   • Payment Method: Defines the type of payment (e.g., instant payments for FedNow/RTP).
   • Requested Execution Date: Date on which payment is expected.
   • Debtor: The party initiating the payment (the payer).
   • Creditor: The party receiving the payment (the payee).
3. Payment Amount (InstdAmt):
   • Amount to be paid, along with the currency.
4. Creditor Account Information (CdtrAcct):
   • The account details of the creditor, typically in IBAN format or domestic account number depending on the country.
5. Debtor Account Information (DbtrAcct):
   • The account details of the debtor.
6. Remittance Information:
   • Structured or unstructured data related to the transaction, such as invoice numbers, references, or additional payment details.
7. Payment Purpose:
   • An optional field that provides more detail on the nature of the payment.

Example of ISO 20022 RfP (pain.013 XML format)

xml

<?xml version="1.0" encoding="UTF-8"?>

<Document xmlns="urn:iso:std:iso:20022:tech:xsd:pain.013.001.07">

    <pain.013.001.07>

        <GrpHdr>

            <MsgId>RFP202309150001</MsgId>

            <CreDtTm>2024-09-15T09:30:47Z</CreDtTm>

            <NbOfTxs>1</NbOfTxs>

            <InitgPty>

                <Nm>Debtor Company Name</Nm>

            </InitgPty>

        </GrpHdr>

        <PmtInf>

            <PmtMtd>TRF</PmtMtd>

            <ReqdExctnDt>2024-09-15</ReqdExctnDt>

            <Dbtr>

                <Nm>Debtor Company Name</Nm>

                <PstlAdr>

                    <StrtNm>Debtor Street</StrtNm>

                    <BldgNb>12</BldgNb>

                    <PstCd>12345</PstCd>

                    <TwnNm>City</TwnNm>

                    <Ctry>US</Ctry>

                </PstlAdr>

            </Dbtr>

            <DbtrAcct>

                <Id>

                    <IBAN>US12345678901234567890</IBAN>

                </Id>

            </DbtrAcct>

            <Cdtr>

                <Nm>Creditor Company Name</Nm>

                <PstlAdr>

                    <StrtNm>Creditor Street</StrtNm>

                    <BldgNb>10</BldgNb>

                    <PstCd>54321</PstCd>

                    <TwnNm>City</TwnNm>

                    <Ctry>US</Ctry>

                </PstlAdr>

            </Cdtr>

            <CdtrAcct>

                <Id>

                    <IBAN>US09876543210987654321</IBAN>

                </Id>

            </CdtrAcct>

            <InstdAmt Ccy="USD">1000.00</InstdAmt>

        </PmtInf>

        <RmtInf>

            <Ustrd>Invoice #2024</Ustrd>

        </RmtInf>

    </pain.013.001.07>

</Document>

Real-Time Payment (RTP) System Overview

• FedNow: A real-time payment service developed by the Federal Reserve for instant fund transfers. It uses ISO 20022 for structured payment messaging, enabling the FedNow system to process payments 24/7/365.
• Real-Time Payments (RTP): Operated by The Clearing House in the U.S., RTP allows for instant payments and requests for payment. It uses ISO 20022 messaging as well.

Both systems support Request for Payment (RfP) as a key feature, allowing billers, merchants, and service providers to send a formal request to customers for payment. The customer can then respond by approving and authorizing the payment in real-time.

Benefits of Using ISO 20022 for RfP

• Rich Data: The standard supports detailed remittance information and additional metadata for each transaction.
• Consistency: Across different jurisdictions and payment systems, ISO 20022 ensures the messages are structured uniformly.
• Interoperability: The global nature of ISO 20022 facilitates cross-border payments as many financial institutions and payment systems globally are moving to this standard.
• Automation: Rich data and structured formats make it easier for banks and businesses to automate the reconciliation of payments, invoices, and other processes.

Implementation Using API

When working with API-based integrations for FedNow or RTP, you would typically send and receive these ISO 20022 XML messages via a REST or SOAP API, where:

• API Endpoint: Provides the interface for sending the ISO 20022-compliant XML data.
• Authorization: OAuth 2.0 or other token-based mechanisms for secure communications.
• Response Handling: The response for each payment request (pain.014) will provide the status of the request (accepted/rejected).

API Example for Sending RfP in ISO 20022

bash

POST /api/v1/payments/request

Content-Type: application/xml

Authorization: Bearer <token>

<ISO20022Request>

    <!-- pain.013 XML body goes here -->

</ISO20022Request>

Conclusion

ISO 20022 is becoming the global standard for real-time and instant payment systems like FedNow and RTP, facilitating efficient, secure, and rich-data transactions through Request for Payment messages. If you’re integrating these with your system via an API, ensuring compliance with the ISO 20022 structure will be crucial.