Saturday, September 23, 2023

ISO20022 : FIToFICustomerCreditTransfer

 An FIToFICustomerCreditTransfer message refers to the transfer of funds between two banks, where an amount is moved from a debtor account to a creditor beneficiary.

FIToFICustomerCreditTransfer messages facilitate the transfer of cash between debtors and creditors via correspondent banks or infrastructures. These messages can be transmitted as individual or grouped instructions, sharing common characteristics, and may be processed in batch mode for convenience and efficiency purposes. The processing of credit transfers varies across countries and systems.

Depending on the circumstances, an intermediary or reimbursement agent may serve as a mediator between the debtor and creditor agents. The forthcoming narrative will expose upon the precise function of said agent.

In situations where the recipient agent is responsible for managing an account on behalf of the sending agent, it should be noted that this scenario encompasses instances where the sending agent holds an account with a branch or head office of the recipient agent and authorizes them to obtain reimbursement from said institution. It is important for the sending agent to have knowledge of any intra-group agreements that permit this arrangement.

A system for clearing and settling payments may take place between a debtor agent and creditor agent, or any other agents involved. However, the detailed process of clearing - where the clearing agent receives information on the transaction and sends payment details to the settlement agent (if applicable) - falls outside of our scope and will not be discussed here. This procedure encompasses calculating settlement positions as well as transmitting files to the settlement agent. The settlement agent then transfers funds from the debtor to creditor in compliance with the appropriate settlement cycle, based on information provided by the clearing agent in their report.

The sequence diagrams exclusively depict communications pertaining to interbank credit transfer. The initial contracts established between the debtor and creditor, such as orders and invoices, as well as the CustomerCreditTransferInitiation message transmitted by the debtor are beyond the scope of this diagram and hence excluded.

When the  Debtor Agent and Creditor Agent are Correspondents?

The debtor agent and creditor agent are correspondents in the currency of the transaction.

The scenario encompasses the debtor agent's provision of account services for the creditor agent, as well as vice versa. Additionally, it accounts for instances where a direct link exists between the debtor and creditor agents via a payment clearing and settlement system.

The debtor agent sends the FIToFICustomerCreditTransfer message to the creditor agent.

The creditor agent optionally confirms the processability of the FIToFICustomerCreditTransfer instruction by sending a positive FIToFIPaymentStatusReport message to the debtor agent.

When  Debtor Agent and Creditor Agent are not Correspondents - 1? 

The scenario encompasses the payment clearing system, wherein a clearing and/or settlement agent acts as an intermediary between the debtor agent and creditor agent. For ease of comprehension, this scenario is restricted to only one intermediary party situated between the said agents. 

The debtor agen dispatches the FIToFICustomerCreditTransfer communication to the intermediary agent. The latter may, at their discretion, verify the feasibility of said transfer via a positive FIToFIPaymentStatusReport message sent back to the debtor's agent. Subsequently, said intermediary forwards this same message to the creditor's representative. This final party also has the option of verifying whether or not such a transaction is feasible.

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