Payment

SWIFT

Posted by Sagar A
  • SWIFT is a member-owned cooperative
  •  Provides the proprietary communications platform, products and services that allow customers to connect and exchange financial information securely and reliably.
  •  Acts as the catalyst for the financial community to shape market practice, define standards and consider solutions to issues of mutual interest.
  •  Does not hold funds or manage accounts on behalf of customers, and does not store financial information on an on-going basis.
  •  Does not perform any form of clearing or settlement.

SWIFT MT and ISO20022 messages

MT101 – MT199 – Customer Payments & Cheques

MT200 – MT299 – FI transfers

MT300 – MT399 – Treasury Markets – Foreign Exchange, Money Markets and Derivatives

MT400 – MT499 – Collections and Cash Letters

MT500 – MT599 – Securities Markets

MT600 – MT699 – Treasury Markets – Precious Metals, Syndications

MT700 – MT799 – Documentary Credits and Guarantees

MT800 – MT899 – Travellers Cheques

MT900 – MT999 – Cash Management and Customer Status

SWIFT MT Message Structure Blocks 1 to 5

Block 1 :Basic Header

The only mandatory block is the basic header. The basic header contains the general information that identifies the message, and some additional control information. 

Block 2: Application Header

The application header contains information that is specific to the application.

Block 3: User Header

The user header is an optional header.

Block 4: Text Block

The text is the actual data to transfer.

Block 5: Trailer

The trailer either indicates special circumstances that relate to message handling or contains security information

Structure Of MT Message


Payment Fees / Transaction Charges

The sending bank and receiving bank in a payment transaction may charge a fee for processing the payment. Within each payment specific codes are used by the sending bank to understand how any payment charges or payment fees should be handled.

The Difference between BEN, OUR, SHA

  • BEN (BENeficiary) –
    • The Payee (recipient of the payment) will incur all of the payment transaction fees
    • Typically, the recipient will receive the payment minus the transfer charges
    • The Payer (sender of the payment) will not pay any payment fees
  • OUR –
    • The Payer (sender of the payment) will bear all of the payment transaction fees
    • Normally you will be billed separately for the payment transfer
    • The Payee (recipient of the payment) will not pay any payment fees,
    • The beneficiary will receive the full amount of the payment
  • SHA (SHAred) –
    • The Payer (sender of the payment) will pay all fees charged by the sending bank
    • You will be billed separately for the payment transfer
    • The Payee (recipient of the payment) will pay all fees charged by the receiving bank
    • The recipient will receive the payment minus any correspondent /intermediary fees

Where to Indicate Payment Fees

If you’re submitting the payment via an App, internet banking or a paper form you’ll select one of the above options from a drop-down list. But if you’re generating the payment within your ERP system, here’s where you specify this information:

MT101 – Field 71A: Detail of Charges

In the MT101 specify the appropriate value in field 71 (detail of charges) as follows:

  • :71A:BEN
  • :71A:OUR
  • :71A:SHA

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