Encoding

Encoding in text file context (such as XML file) is a map between Binary code and Character.  For example character a is presented with same binary value in the common encodings as the table below shows:

Problems can emerge when in different encodings same binary code represents different characters. As the table below shows the file might contain invalid binary values if actual encoding is something else than the one given in XML declaration.

ISO 20022 has decided to restrict character set usage to only UTF-8 on the fact that it is the most efficient (length-wise) way to transport characters http://www.iso20022.org/FAQ.page.