Hello fintech enthusiast, today I will explain the difference between MT and MX messages in the context ISO 20022 Payments. Before going ahead lets have the basic introduction of ISO 20022.
Introduction to ISO 20022
ISO stands for International Organization for Standardization. ISO 20022 is a global standard for financial system that basically helps to communicate between multiple financial system across the globe. Just like the Machine language for computers, it is for financial systems only. This organization basically publish the standard format, structures, that follow all financial system for payments, securities, and trade services.
Time to time, ISO published various kind of standard. But today we are talking about the Payments Messages of difference between MT and MX.
SWIFT MT vs MX Messages
There are various kind of payments fund transfer like RTGS, NEFT, SWIFT transfers etc. SWIFT is also a different entity than ISO. Swift stands for Society for Worldwide Interbank Financial Telecommunication. It is primarily responsible for facilitating secure international money transfers between banks.
When Bank A needs to send funds to Bank B in another country, it uses the SWIFT network for the transfer. Along with the transaction, a message is sent to the receiving bank in a standardized format called MT messages, which ensures proper communication and processing of the transfer.
MT Messages:-
MT stands for Message Type. MT messages was rolled out by SWIFT in 1970s. From then, these messages types are used for international transfers. MT messages are text-based, fixed predefined based structure which ultimately leads to data issues now. Due to its fixed structure, MT messages offer very limited data which makes harder to capture detailed transaction information.
There are multiple kinds of swift transfer like customer credit transfer(MT103), Bank to Bank transfer(MT202), etc.
Example of MT103-
John Doe(Sender)- go to Bank A(US bank) – transfer to Bank B(UK Bank)- Jane Smith(Receiver)
{1:F01BANKUS33AXXX0000000000}{2:I103BANKGB22XXXXN}{4:
:20:1234567890
:23B:CRED
:32A:240101USD1000,00
:50K:/123456789
John Doe
123 Main St
City, Country
:59:/987654321
Jane Smith
456 Elm St
City, Country
:70:Invoice payment
:71A:OUR
:72:/BNK/Payment details
}
Breakdown of fields:
- :20 – Transaction reference number.
- :23B – Transaction type (ex- CRED for credit).
- :32A – Value date, currency, and amount.
- :50K – Ordering customer details(Debtor)
- :59 – Beneficiary customer details(Creditor)
- :70 – Payment details (ex- purpose of payment).
- :71A – Charges (e.g., OUR indicates the sender pays all charges).
- :72 – Additional information (ex- payment details).
MX Messages:-
Due to MT Messages restriction, SWIFT is adopting now ISO 20022 as the new standard for financial messaging to replace its legacy MT messages to MX messages. Swift also facilitated and help to implement the transition to ISO20022 globally while ensuring interoperability between financial institutions.
MX stands for ISO 20022 XML-based messages. These are XML based messages which are designed to handle more complex data, which can easily we can get and consume through the MX messages. Here just like MT 103, MT202, in MT, Pacs.008 and Pacs.009 introduced.
Example of MX -Pacs.008(MT103 in MT)
<document xmlns=”urn:iso:std:iso:20022:tech:xsd:pacs.008.001.02″>
<CstmrCdtTrfInitn>
<GrpHdr>
<MsgId>1234567890</MsgId>
<CreDtTm>2024-01-01T10:00:00</CreDtTm>
<NbOfTxs>1</NbOfTxs>
<CtrlSum>1000.00</CtrlSum>
</GrpHdr>
<PmtInf>
<PmtInfId>2345678901</PmtInfId>
<PmtMtd>TRF</PmtMtd>
<NbOfTxs>1</NbOfTxs>
<CtrlSum>1000.00</CtrlSum>
<Dbtr>
<Nm>John Doe</Nm>
<PstlAdr>
<AdrLine>123 Main St</AdrLine>
<City>City</City>
<Country>US</Country>
</PstlAdr>
<Id>
<OrgId>
<BIC>BANKUS33</BIC>
</OrgId>
</Id>
</Dbtr>
<DbtrAcct>
<Id>
<IBAN>US1234567890</IBAN>
</Id>
</DbtrAcct>
<CdtTrfTxInf>
<PmtId>
<EndToEndId>1234567890</EndToEndId>
</PmtId>
<Amt>
<InstdAmt Ccy=”USD”>1000.00</InstdAmt>
</Amt>
<Cdtr>
<Nm>Jane Smith</Nm>
<PstlAdr>
<AdrLine>456 Elm St</AdrLine>
<City>City</City>
<Country>GB</Country>
</PstlAdr>
<Id>
<OrgId>
<BIC>BANKGB22</BIC>
</OrgId>
</Id>
</Cdtr>
<CdtrAcct>
<Id>
<IBAN>GB9876543210</IBAN>
</Id>
</CdtrAcct>
<RmtInf>
<Ustrd>Invoice payment</Ustrd>
</RmtInf>
</CdtTrfTxInf>
</PmtInf>
</CstmrCdtTrfInitn>
</document>
If you able to find the difference, MX has more richer data. Below is the table of MX Equivalent Field to MT messages.
| MT103 Tag | MT103 Field | MX Equivalent | MX Field |
|---|---|---|---|
| :20 | Transaction reference number | <MsgId> | Message ID |
| :23B | Transaction type (e.g., CRED) | <PmtMtd> | Payment Method |
| :32A | Value date, currency, amount | <Amt> | Amount |
| :50K | Ordering customer details | <Dbtr> | Debtor (Ordering Customer) |
| :59 | Beneficiary customer details | <Cdtr> | Creditor (Beneficiary Customer) |
| :70 | Payment details (purpose of payment) | <RmtInf> | Remittance Information |
| :71A | Charges (e.g., OUR indicates the sender pays all charges) | – | Inferred in <PmtInf> |
| :72 | Additional information (e.g., payment details) | <RmtInf> | Remittance Information |
Key Difference Between MT and MX Messages
Here are the main differences between MT and MX message.
1. Messages:- MT messages use text-based format with fixed fields while MX use XML based format which allows richer data.
2. Data Structure:- MT has fixed structure with fixed fields, on the other hand MX has dynamic structure supporting complex and detailed data which can also be extended.
3. Standard:- MX follows ISO 20022 global standard however MT follows the SWIFT proprietary standard (ISO 15022).
4. Message Types:- In MT most commonly swift messages used are MT103 and MT202 while in MX Pacs.008 and Pacs.009.
5. Integration and Extensibility:- Due to Format of MT messages, it is less extensible and hard to integrate with new systems while MX is highly extensible and can be easily integrated with other standards.
6. Complexity:- MT messages are simple but limited in scope, on the other hand MX messages are complex but offer more detailed information like remittance information, charges, and more.
Detailed Key Differences between MT and MX Messages
| Aspect | MT Messages | MX Messages |
|---|---|---|
| Message Format | Text-based (fixed fields and codes) | XML-based (flexible, rich data) |
| Standard | SWIFT proprietary (ISO 15022) | ISO 20022 global standard |
| Message Types | MT103, MT202, etc. | PACS.008, PACS.009, etc. |
| Data Structure | Fixed structure with limited fields | Dynamic structure, more extensible |
| Data Capacity | Limited data capacity | Higher data capacity |
| Integration | Harder to integrate with modern systems | Easily integrable with modern systems |
| Adoption | Legacy, still widely used | Future-focused, modern financial systems |
| Example | MT103 (Credit transfer) | PACS.008 (Credit transfer) |
| Complexity | Simple, fixed structure | Complex, flexible, more detailed |
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