In a previous article, serial and cover methods were presented. Then we analyzed a concrete example of payment settled with cover method in the following articles:
- SWIFT MT103 202 Cover payment analysis – part 1
- SWIFT MT103 202 Cover payment analysis – part 2
- SWIFT MT103 202 Cover payment analysis – part 3
- SWIFT MT910 Confirmation of Credit – Detailed analysis
Now we want to see how the same payment can be settled using the serial method. In the coming series of three articles, we will consider the MT103 serial messages exchanged between the parties and their meaning. On the following figure, you can see the different parties involved and their roles in the first MT103. The second and third MT103 serial will be analyzed in the next articles.
As expected in the serial method, one message is initiated by the sender to settle the funds. That message moves from one party to the next in the payment chain until it reaches the beneficiary bank.
The table below contains the fields that are transported in this first MT103 serial message. An additional column (comments) provides further explanation, so that it is easy to understand each field and what it is used for.
Narratives and notes on this SWIFT MT103 serial message
As usual, there is more to this SWIFT MT103 serial message than meets the eye. The following narrative and notes allow to get a deeper understanding of the message content.
Narrative and note 1 (Main purpose of this SWIFT MT103 serial message)
The Sender (BNPAFRPP) is instructing the Receiver (PNBPUS3N) to debit its account and credit the intermediary institution (IRVTUS3N) account.
Narrative and note 2 (Fields 53a and 54a are not in the SWIFT MT103 serial message)
Fields 53A and 54A (Sender’s and receiver’s correspondents) are not present. This means payment does not go through correspondents. So BNPAFRPP has an account with PNBPUS3N. The intermediary institution IRVTUS3N (56A) is the next party in the chain. It will receive the funds from PNBPUS3N, the receiver of this message. BSCHESMM (57A) will receive the funds from the intermediary institution IRVTUS3N (56A), for credit to the beneficiary’s account. IRVTUS3N is US correspondent of BSCHESMM.
Narrative and note 3 (Ordering and account with institution in the SWIFT MT103 serial message)
There is no ordering institution (52A) in the message. That means the ordering customer is customer of the Sender, BNPP.
An account with institution (57A) is present in the message, i.e. the Beneficiary customer account (:59:/ES6300491800132710387658) is not held by the receiver (PNBPUS3N) of this message, but by the account with institution.
Narrative and note 4 (Details of charges in the SWIFT MT103 serial message)
Details of charges (71A) is SHA. The charges are shared between Ordering and Beneficiary customer. Sender pays charges to ordering bank. Beneficiary pays to receiving and other intermediary banks. Note that the Ordering bank may have taken charges, but they do not appear in the MT103 Message.
This ends our analysis of the first MT103 serial message. In the next article, we will consider the second MT103 message exchanged between Wells Fargo and Bank of New York Mellon.