A payment factory is a central unit or platform that processes the payments of all group companies, using one format (often ISO 20022pain.001) and few bank connections. In a payment on behalf of (POBO) model the central entity pays suppliers from its own accounts; collection on behalf of (COBO) does the same for receipts.
In-house bankAn in-house bank is a group treasury entity that acts as a bank for the group's subsidiaries: it keeps internal accounts for them, nets and settles intercompany flows, lends and borrows internally and makes external payments on their behalf. It concentrates liquidity and foreign exchange risk and reduces the number of external bank accounts.
pain.001 (customer credit transfer initiation)pain.001 is the ISO 20022 message a company or other customer sends to its bank to start one or more credit transfers, usually as a file from its ERP or treasury system. The bank answers with a pain.002 status report. Several versions are in use, and market guides such as the European Payments Council implementation guidelines set the details.
EBICS (Electronic Banking Internet Communication Standard)EBICS is a standard protocol for secure file transfer between companies and banks over the internet, used mainly in Germany, France, Austria and Switzerland for payment files and statements. It uses electronic signatures, including distributed signatures by several authorised persons, and version 3.0 aligns order types with ISO 20022 business transactions.
Virtual accounts (virtual IBANs)Virtual accounts are sub-ledger account numbers, often virtual IBANs, that a bank issues on top of a real account so that each customer, subsidiary or invoice gets its own payment reference. Incoming funds land in the real account and are matched automatically. The 2024 EU anti-money laundering package brings virtual IBANs into national bank account registers.
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.
pain.001 (customer credit transfer initiation)pain.001 is the ISO 20022 message a company or other customer sends to its bank to start one or more credit transfers, usually as a file from its ERP or treasury system. The bank answers with a pain.002 status report. Several versions are in use, and market guides such as the European Payments Council implementation guidelines set the details.