The messages exchanged in the SEPA Credit Transfer Scheme

If you have read the previous articles, you should have a pretty good understanding of the Four Corner Model elements: the clearing and settlement systems and the end parties. After having studied these fundamental elements, let us now look at the messages exchanged in SEPA Credit Transfer Scheme between the different parties. We will first limit ourselves to the messages mentioned in the EPC (European Payment Council) documents:

• EPC125-05_SCT_RB_vX.y_Approved.pdf – SEPA Rulebook version X.y
• EPC115-06-Interbank-CTIG-VX.y-Approved.pdf – SEPA Interbank Implementation guidelines version X.y
• EPC132-08-C2B-CTIG-VX.y-Approved – SEPA Customer-to-bank Implementation guidelines version X.y
• EPC188-09-Recommendation-on-Customer-Reporting-SCT-and-SDD

They are all free and publicly available. Updated versions of the first three documents are published almost every year. To get the latest versions, go to the EPC website and download them.  The links to the SCT rulebook and implementation guidelines are available on this page. The recommendations on customer reporting concerns the SCT as well as the SDD (SEPA Direct Debit). They are available here.

The Rulebook EPC125-05 contains the rules and obligations for all participants to the SEPA Credit Transfer Scheme. The implementation guidelines (IG) and the recommendation on customer reporting provide the specifications of the messages exchanged in the Sheme. SEPA messages are all based on the ISO 20022 standard. In the Implementation guidelines (EPC115-06 and EPC132-08), messages are presented as belonging to two spaces depicted in the next figure: Customer-to-bank space on the top and Interbank space on the bottom.

The customer-to-bank space refers to the area where customers and banks exchange messages. When the message goes from the Customer to the bank, it is called Customer-to-Bank messages. When it goes in the opposite direction, it is called Bank-to-Customer messages. In general, messages sent from customer-to-bank are seen as orders or instructions from the customer to the Bank. And messages sent from Bank-to-Customer on the other hand are seen as reporting. The bank informs the customer about the execution of its payments.

The Interbank space refers to the area where banks exchange messages among themselves. The exchange can be done either directly or through a CSM.

The picture below contains all the messages mentioned in the EPC documents and the direction in which they flow.

When we look at the naming of the messages exchanged in SEPA Credit Transfer Scheme, we see that they all begin with four letters:

• PAIN and CAMT in the Customer-to-Bank space
• PACS and CAMT in the Interbank space

These four letters are inherited from the ISO20022 standard:

• PAIN stands for PAyment INitiation: Pain messages are used by originators to send instructions to the bank and received status report about their execution from the Bank. They are used exclusively in the C2B space.
• CAMT stands for CAsh ManagemenT: In the C2B space, Camt messages are used to inform the customer about his cash situation as a result of the execution of instructions or reception of payments. Customers can also send camt messages to cancel orders or transactions. In the Interbank space, Camt messages are used to cancel orders or transactions as well, but in addition to reply to cancellation requests.
• PACS stands for PAyment Clearing & Settlement: Pacs messages are used to transfer money from one financial institution to another financial institution. They are used exclusively in the Interbank space.

Another interesting thing on messages’ names is the series of numbers after the four letters. For instance, you may wonder when you see Pacs.008.001.02, why do we have the numbers 008.001.02? And is there any meaning behind? We will consider that in the next article.

For your information, I have published a book about SEPA Credit Transfer where one full chapter is dedicated to the messages exchanged in SEPA Credit Transfer Scheme.

Below are the links on amazon.

Kindle edition

Paperback edition

You can download the sample for free. Here is the link to download the sample of the SEPA Credit Transfer eBook.

You can buy the ebook and get a free access to a content rich webinar on this page.