Schemes and standards for funds transfers in different countries of the world. SEPA Credit Transfer, Domestic Transfer, Interbank systems, Multilateral clearing, Real-Time Gross Settlement
The IBAN number or simply IBAN (International Bank Account Number) serves as the unique identifier for the bank account in SEPA payments. Debtor and Creditor accounts must be provided therein in IBAN formats. But contrary to what many believe, IBANs are not used everywhere in the world as we will see below. This article begins with […]
Simply put, SEPA payments are pan-European payments instruments in Euro, created as results of the SEPA project whose aim is to harmonize standards and practices for electronic and cash payments across the SEPA area. The SEPA area consists of 34 countries out of which some do not use Euro as local currency. If you are […]
The SWIFT BIC code is a standardized international identifier (ISO 9362) used in financial messages exchanges. Understanding what the BIC code is fundamental because it is used to identify entities and to route payments messages over SWIFTNet, the SWIFT secure IP Network. What does BIC stand for? and what is the BIC? Does BIC stand for […]
In this article, we will look at the second strategy to understand how cross border payments work: Grasp the principles of Correspondent Banking and account relationships between banks located in different currency zones. In case you have not read the introductory article and the article about the first strategy, I strongly recommend you to read […]
In this article, we will look at all the messages exchanged by the beneficiary bank in the interbank space. If you are starting your journey in SEPA, you will think immediately that is the bank that receives credit transfers. And that is true. Yes it receives the credit transfers. But it does much more that. […]
Up to now, we have considered the messages exchanged in the SCT scheme between sending and receiving banks. In this article and the next, we will zoom in on a bank and particularly at the specific role that they take in the exchange of messages. There is trap to avoid at the beginning of your […]
In the previous article on-us transactions were introduced and we looked at them at the level of one bank. In this article, we continue our analysis of on-us transactions but considered now at bankgroup level. In a wider sense on-us transactions occur when the originator bank and the beneficiary bank are separate entities but belong […]
On-us transactions represent a significant part of transactions processed by banks. They can be classified in two groups: Intrabank and Intrabankgroup transactions. The word Intra is a prefix meaning “within something, inside something, on the inside”. An intrabank transaction is a transaction exchanged inside or within the same bank. An intrabankgroup transaction is a transaction […]
As we saw in a previous article, the SEPA Credit Transfer Rulebook obliges the scheme participants to exchange exception messages (the r-messages) during specific timeframes in the interbank space. The scheme does not say how many days before settlement a credit transfer can be forwarded to the clearing system. In the customer-to-bank space, the scheme […]
In this article, we continued our analysis of the SCT interbank messages. The previous article was about the pacs.008 and pacs.002 messages. The pacs.008 is used to transfer funds from Originator Bank to Beneficiary Bank. The pacs.002 is initiated to reject credit transfers that a CSM or Bank cannot process. As said in the previous […]