Charge bearer codes state who pays the fees of a cross-border payment: OUR (the payer pays all charges), SHA (each side pays its own bank) and BEN (the payee pays all, deducted from the amount). ISO 20022 uses DEBT, SHAR and CRED, plus SLEV, which follows the service level rules and is mandatory in SEPA.
Correspondent bankingCorrespondent banking is an arrangement in which one bank (the correspondent) holds deposits for another bank (the respondent) and makes and receives payments for it, usually in a currency or country where the respondent has no direct access. It underpins most cross-border payments and requires due diligence on the respondent.
MT 103 (single customer credit transfer)MT 103 is the legacy Swift message for a single customer credit transfer between banks, with fields such as 50 (ordering customer), 59 (beneficiary), 70 (remittance information) and 71A (charges). In cross-border payments pacs.008 has replaced it, and banks still meet MT 103 data in archives, translations and investigations.
Swift gpi (global payments innovation)Swift gpi is a service level for cross-border payments on Swift, launched in 2017, under which banks agree to credit funds on the same day where possible, show the fees deducted, pass remittance information unchanged and update a central tracker at each step. Each payment is followed end to end through its UETR.
Cross-border Payments RegulationRegulation (EU) 2021/1230 requires that charges for cross-border payments in euro within the EU equal those for corresponding national payments. It also requires providers to disclose currency conversion charges, expressed as a mark-up over the latest euro reference rate of the European Central Bank, before a payment or card transaction is made.
ISO 20022ISO 20022 is the international standard for financial messages, built from a common business dictionary and usually expressed in XML. Payment messages are grouped as pain (customer to bank), pacs (bank to bank) and camt (cash management, such as statements). It is the format of SEPA, T2, CHAPS and Swift cross-border payments.
SEPA (Single Euro Payments Area)The Single Euro Payments Area (SEPA) is the area in which people, companies and public bodies make and receive euro credit transfers, instant payments and direct debits under the same rules, whether domestic or cross-border. It covers the EU, the European Economic Area and several other European countries, and rests on European Payments Council schemes and the SEPA Regulation.