SWIFT - Customer Payments

🟦 CATEGORY 1 — Customer Payments & Cheques (MT1xx)

🔹 Purpose

Used when a bank sends or receives payments on behalf of customers (individuals, companies, trusts).

These are client-originated payments, not bank-to-bank treasury movements.

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📌 Key Message Types (Conceptual)

Although individual MT numbers are not listed in detail here, Category 1 messages cover:

• Customer wire transfers

• Cheques and cheque clearing

• Customer payment instructions

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🔁 MX (ISO 20022) Equivalents

Used in payment clearing & settlement systems:

• pacs.003 – FI-to-FI customer credit transfer (batch clearing)

• pacs.004 – Payment return / reversal

• pacs.008 – Customer credit transfer (core customer wire message)

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🏦 Who Uses This

• Retail banks

• Corporate banking

• Private banking

• Trust and fiduciary accounts

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✅ Real-World Use Cases

• Client wires funds to another bank

• Trust distributes funds to beneficiaries

• Corporate payroll and vendor payments

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🟩 CATEGORY 2 — Financial Institution Transfers (MT2xx)

🔹 Purpose

Used exclusively for bank-to-bank transfers, not customers.

These messages move institutional funds, often related to:

• Treasury operations

• Liquidity management

• Correspondent banking

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🔁 MX Equivalent

• pacs.009 – Financial Institution Credit Transfer

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🏦 Who Uses This

• Correspondent banks

• Central banks

• Clearing banks

• Treasury desks

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✅ Real-World Use Cases

• Bank moves funds between nostro/vostro accounts

• Settlement of interbank obligations

• Treasury liquidity balancing

⚠️ Important:
MT202 / pacs.009 does not represent customer money, even if a customer is indirectly involved.

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🟨 CATEGORY 3 — Foreign Exchange, Money Markets & Derivatives (MT3xx)

🔹 Purpose

Used to confirm and settle financial market transactions, not payments for goods/services.

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📌 Covers

• Foreign exchange (FX) deals

• Interest rate swaps

• Options

• Money market instruments

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🏦 Who Uses This

• FX trading desks

• Investment banks

• Treasury & capital markets teams

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✅ Real-World Use Cases

• FX spot/forward confirmations

• Swap settlements

• Hedging transactions

💡 These messages confirm deals, they do not replace payment messages.

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🟧 CATEGORY 4 — Collections & Cash Letters (MT4xx)

🔹 Purpose

Used for paper-based and collection-driven payment instruments, often tied to documents.

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📌 Message Types Explained

MT400 — Advice of Payment

• Notifies that payment has been made under a collection

MT405 — Clean Collection

• Collection without commercial documents

• Typically financial instruments only

MT450 — Cash Letter Credit Advice

• Notifies receipt of cash letter credits (bulk cheque processing)

MT455 — Cash Letter Credit Adjustment Advice

• Used to adjust previously advised cash letter credits

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🏦 Who Uses This

• Trade finance departments

• Collection banks

• Clearing institutions

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✅ Real-World Use Cases

• Documentary collections

• International cheque clearing

• Legacy trade settlement workflows

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🟪 CATEGORY 5 — Securities (MT5xx)

🔹 Purpose

Used for settlement, delivery, reconciliation, and claims related to securities.

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📌 Message Types Explained

MT541 — Receive Against Payment (RAP)

• Receiving securities only when payment is made

MT543 — Deliver Against Payment (DAP)

• Delivering securities in exchange for payment

MT559 — Paying Agent’s Claim

• Used to claim payment from an issuer or paying agent

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🔁 MX (ISO 20022) Equivalents

• sese.020 – Securities settlement transaction instruction

• sese.023 – Securities settlement status advice

• sese.033 – Securities settlement transaction confirmation

• sese.036 – Securities settlement condition modification

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🏦 Who Uses This

• Custodian banks

• Investment banks

• Clearing systems (Euroclear / Clearstream)

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✅ Real-World Use Cases

• Bond settlement

• Equity delivery

• MTN and note settlement

• Paying agent claims

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🟥 CATEGORY 7 — Documentary Credits & Guarantees (MT7xx)

🔹 Purpose

Used for trade finance instruments, not direct cash transfers.

These messages support obligations, not immediate payments.

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📌 Message Types Explained

MT752 — Authorisation to Pay / Accept / Negotiate

• Authorizes a bank to honor a documentary credit

MT754 — Advice of Payment / Acceptance / Negotiation

• Confirms that action has been taken under an LC

MT756 — Advice of Reimbursement or Payment

• Requests or confirms reimbursement under trade finance structures

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🏦 Who Uses This

• Trade finance banks

• Issuing banks

• Confirming banks

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✅ Real-World Use Cases

• Letters of Credit (LC)

• Bank Guarantees (BG)

• Standby Letters of Credit (SBLC)

⚠️ These messages do not move money by themselves — they authorize or confirm obligations.

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🧠 Key Strategic Takeaways

• MT ≠ Money by default
  Some messages authorize, some confirm, some settle, some advise.

• Categories define intent

  • Cat 1 → Client money

  • Cat 2 → Bank money

  • Cat 3 → Market deals

  • Cat 4 → Collections

  • Cat 5 → Securities

  • Cat 7 → Trade instruments

• MX (ISO 20022) is the future, but MT is still operational worldwide

Banking platform reminder: The CRM Portal is used for communication, support, and service coordination. For secure onboarding, document verification, account setup, transaction preparation, and more efficient client service, please also register on the U.S. Capital Private Bank banking platform at www.uscapitalprivatebank.com as soon as your CRM Portal registration is complete.