Previous:   Structured Remittance Information in SWIFT MX: Purpose, Elements, and Compliance Deadlines

Purpose, Category Purpose and Regulatory Reporting

The three structured elements – Purpose, Category Purpose, and Regulatory Reporting, all are used provide some kind of detailed information about the underlying payment in a cross-border remittance. But there are very important conceptual differences about when each element should be used in a MX message. Let us understand.

Similarities and Differences in Uses

The similarity among these three elements is that all of these provide some kind of insight about the basic reason or purpose of why the payment is being made. But the similarity ends there. Each element is targeted for use by different players involved in a payment chain.

The Purpose element bears the commercial reason for the payment. This is meant to be used by the end customers like the debtor and the creditor for their own reconciliation purposes. Banks have nothing to do with this element for their own use, they just pass on the value in this element unchanged across the payment chain like post offices.

The Category Purpose bears the high-level category to which this payment belongs. This is meant to be used by agents to determine if any specialized processing will be required for such kinds of payments. It can be bulk processing of salaries or security related payments, or usage by another software for payments related to government or taxes etc.

The Regulatory Reporting bears information to comply with Regulatory Authority requirements. This is also meant to be used by agents, specifically the debtor agent and/or the creditor agent but not for their own internal processing usage, it is meant for reporting certain information about the payment to the concerned regulatory authorities against some pre mandated requirements by that country. So, here the usage has entirely a compliance angle.

For more insight on the use of structured elements in SWIFT MX messages, visit here.

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