Wednesday, November 22, 2023

ISO 20022 Settlement Method

 ISO 20022 Settlement Method


In ISO 20022, the Settlement Method element is used to indicate how a payment is to be booked and settled. There are four possible values for the Settlement Method: INDA, INGA, COVE, and CLRG[1]. Here's a brief explanation of each:


1. **INDA**: Settlement is done by the Instructed Agent. In this case, the Instructed Agent (e.g., Deutsche Bank) performs the settlement of the payment leg[4].


2. **INGA**: Settlement is done by the Instructing Agent. In this case, the Instructing Agent (e.g., the bank sending the payment message) performs the settlement of the payment leg. Settlement is already done at the moment the Instructing Agent sends the payment message[1].


3. **COVE**: Settlement is done through a Cover Payment. In this case, the settlement is performed through a separate payment process, such as a cover payment, rather than directly between the Instructing and Instructed Agents[4].


4. **CLRG**: This value is used for High-Value Payment Systems (HVPS) and is not applicable for CBPR+ messages[3].


For example, if the Settlement Method is INGA, it means that the Instructing Agent performs the settlement of the payment leg. Conversely, if the Settlement Method is INDA, it means that the Instructed Agent performs the settlement of the payment leg[1].


Citations:

[1] Settlement Method: INGA vs. INDA - ISO 20022 payments https://www.iso20022payments.com/cbpr/settlement-method-inga-inda/

[2] Tutorials - Corporates and Institutions - Deutsche Bank https://corporates.db.com/in-focus/Focus-topics/iso20022/tutorials

[3] [PDF] Module 4: ISO pacs.008.001.08 - BNY Mellon https://www.bnymellon.com/content/dam/bnymellon/documents/pdf/iso-20022/Module%204_December2020_pacs008.pdf

[4] [PDF] Payments Formatting Guide for high value payments – ISO 20022 - Corporates and Institutions https://corporates.db.com/files/documents/payments_formatting_guide_for_high_value_payments_iso20022.pdf

[5] [PDF] ISO 20022 MDR Part 1 - Payment Clearing and Settlement - swift https://www2.swift.com/knowledgecentre/rest/v1/publications/stdsmx_pcs_mdrs/4.0/SR2021_MX_PaymentsClearingAndSettlement_MDR1_Standards.pdf


By Perplexity at https://www.perplexity.ai/search/9d8b4fe7-af17-4966-ae6d-9e139d98c907?s=m

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