Title and Content

109 255 131 0 85 214

207 255 56 99 165 73
246 255 155 190 28 42

Dark 1 Light 1 Dark 2 Light 2 Accent 1 Accent 2

Basic Concept Of Pacs & Pain – Low Value

185
175
164
151
75
7
193
187
0
255
221
62
255
255
255
236
137
29

Payment
Accent 3 Accent 4 Accent 5 Accent 6 Hyperlink Followed Hyperlink

127 203 179 212 255 255

175 215 149 195 242 249
221 238 197 223 171 213

Tata Blue 50% Tata Blue 25% Purple 50 % Purple 25 % Yellow 50 % Yellow 25 %

229 248 180 214 241 251

205 241 213 231 240 251
186 235 154 200 202 241

Geeta Brown
Rama 50 %Rao Brown
02 25Nov
% 2017
Green 50 % Green 25 % Light Green 50% Light Green 25%
Preface

Agenda :

 Low-value payment system

 What is Bulk Transaction Processing

 Batching of Payment

 ISO 20022 Standard

 Swift Message Structure

2
 Low-value payment
Credit Transfer (CT)
 movement of some value of money from payer to payee involving credit push (payment process is

initiated from the payer for transfer of funds to the payee)

 payroll management, benefit transfer by government and one off individual fund transfer.

Direct Debit (DD)

 movement of some value of money from payer to payee involving debit pull (payment process is

initiated

by the payee provided proper mandate is taken from the payer)

Settlement in low value payment systems

 utility bill payments, insurance premium payments

 Choice of settlement is based on three factors risk, speed and cost.

 The inherent attribute of Big in volume Low in value advocates net settlement for low-value

payments (One time or multiple times).

 The net amounts are gross settled.

 The clearings are fed after each net settlement or on drip-feed basis 3
What is Bulk Transaction Processing

Bulk transaction processing allows the users to conveniently make multiple transactions through a single
file upload.

The important features of bulk transaction processing are as follows:

The users can initiate bulk transactions to other ABC Bank accounts. There will be one debit
transaction on the debit account and multiple credit transactions on the credit accounts. Please click
here to generate the file required for bulk Bank Account transfers.

The users can initiate both NEFT and RTGS transactions as well through this functionality. In this
case, each transaction would have a separate debit transaction on the debit account. For instance, if
there are 100 transactions being done through one file upload, the debit account would have 100
transactions on the account statement. Please click here to generate the file required for bulk Deutsche
Bank Account transfers.

In case of bulk transfers to Non ABC Bank accounts, the system automatically decides the transfer
option – RTGS or NEFT, depending on the amount per transaction and the beneficiary bank.

All bulk transfers are essentially scheduled payments. The approvals for the bulk transfers should be
done before the scheduled date for the system to process the bulk transfer instruction.

4
 Batching of Payment
Batching of Payment Instructions The Batching feature on Straight2Bank provides convenience to clients during the
Authorisation workflow of Payments. Several payments can be selected to create one or few batches and enable easy
authorisation of payment instructions before being submitted to the bank for further processing.

Batching is however an optional step in the Transaction initiation workflow and Payments can be authorised and
submitted as individual transactions to the Bank for processing. This feature is available to Straight2Bank users with
appropriate Functional and Data Entitlements. This section is intended to provide an overview of the batching feature on
Straight2Bank and the usage of it.

Types of Batching Payment instructions, whether they are manually created or via Bulk Import (or even those uploaded
via Straight2Bank Access) will be available for Batching based on the user’s Functional and Data entitlements. Only those
payment instructions that are in “Complete” status will be eligible for Batching as online validation of payments will have to
be done in order to submit them to the Bank for further processing. Broadly, there are four methods in which payment
instructions on Straight2Bank can be batched;

1.Manual Batching,

Manual Batching Manual Batching will allow the user to manually select payment instructions and
create a payment batch.
The following steps should be followed to create a payment batch manually

FX Type (i.e.) System Rate / Contract Rate

Payment Center (i.e.) the location where the Debit Account is held
Currency Pair (i.e.) currency pairs will be grouped
Amount Priority (i.e.) whether it is based on Payment Amount or Debit Amount priority
Payment Debit Date,
Payment Value Date,
Parameters defined by the Client during On-boarding (e.g.) Payment Type, Beneficiary and others (refer to subsequent

section for more details on this) c. Based upon the above parameters, one or more batches will be created.

5
 Batching of Payment
2. Auto Batching:

The “Auto Batch” feature on Straight2Bank is an alternative to the “Manual Batch” feature. This
feature
will automatically create payment batches based on the preset batching rules within Straight2Bank
without requiring the user to manually create batches

Payment batches will be auto created based on the batching rules preset in Straight2Bank as well as
any optional parameterised batching criteria enabled for the client.

The payment batches created will be based on the below rules;

a. Authorisation Matrix ID of the payments
b. Whether the payments involve Foreign Exchange or not. If there is a mix of FX and Non FX

3. Add to an Existing Batch

This feature will automatically create payment batches based on the preset batching rules within
Straight2Bank without requiring the user to manually create batches.
The following steps should be followed to automatically create payment batches.

Choose one or more payment instructions and click on “Add to Existing Batch

4. Parameterised Batching

6
 Batching of Payment

4. Parameterised Batching

This is an optional feature available for clients who may want to define up to 3 parameters to be used
for batching of Payment instructions. The chosen parameters will be considered during Manual
Batching, Auto Batching and also when adding payment to an existing payment batch. The full list of
parameters, out of which 3 parameters can be opted to set the client preference for eg

Branch Code

Debit A/C Country Code

Payee Address 1

7
 ISO 20022 Standard
The objective of this International Organization for Standardization (ISO) standard is to accomplish a
global convergence of existing and new message standards from various segments of the financial
industry. ISO 20022 not only includes payment transaction and account reporting messages, but also
covers other areas, including securities trading, foreign trade and treasury.
XML Extensible Markup Language
PACS
PACS (Payments Clearing and Settlement) denotes XML messages used between banks, which is
defined in the ISO 20022 standard.

PAIN
PAIN (Payments Initiation) denotes XML messages used between customer and bank, which is defined
in the ISO 20022 standard.

pain.001
The Customer Credit Transfer Initiation (pain.001) XML message is used for the electronic 
commissioning of payment orders by the customer to the payment submitting financial institution.

pain.002
The XML message Customer Payment Status Report (pain.002) is used by the financial institution to
inform customers about the status of pain.001 credit transfer orders or pain.008 collection orders that
have been submitted

8
 ISO 20022 Standard
pain.008
The Customer Direct Debit Initiation (pain.008) XML message is used for the electronic commissioning
of collection orders by customers to the financial institution. 

9
 Credit Transfer Message Types
ISO 20022 Message types involved

 Pain.001.001.02 – Customer Credit Transfer Initiation

 Pacs.008.001.03 – FI to FI Customer Credit Transfer

 Pacs.002.001.02 – Payment Status Report – Reject

 Pacs.004.001.01– Payment Return

 pain.002.001.02- Payment Status Report

- 10 -
 Credit Transfer Flow

Need to transfer the Money

Originator
Beneficiary

Information Pain 001

of Transfer

Pacs 008
Pacs 008

Beneficiary Bank CSM Originator Bank

- 11 -
 Credit Transfer Return Flow

Need to transfer the Money

Originator
Beneficiary

Pain 001 Pain 002

Pacs 008
Pacs 008

Pacs 004 Pacs 004

Beneficiary Bank CSM Originator Bank

- 12 -
 Credit Transfer Reject Flow

Need to transfer the Money

Originator
Beneficiary

Pain 001 Pain 002

Pacs 008

Pacs 002
Beneficiary Bank CSM Originator Bank

Note: Reject can be sent from Beneficiary Bank and originator Bank also.

- 13 -
 Direct Debit Message Types

ISO 20022 Message types involved

 Pain.008.001.01 – Customer Direct debit initiation

 Pacs.003.001.01 – Bank to Bank Direct debit collection

 Pacs.002.001.02 – Payment Status report – Reject

 Pacs.004.001.01 – Payment Return

 Pacs.007.001.01 – Payment Reversal

 Pacs.006.001.01 – Direct Debit Cancellation

- 14 -
 Direct Debit Mandate Flow

Mandate Signed

Creditor
Debtor
1

Mandate
Mandate Information
2 2
Information

Mandate information
Debtor bank Creditor Bank

- 15 -
 Direct Debit Initiation

Pre-notification D-14CD

Creditor
Debtor

Pain 008

Pacs 003
Pacs 003

Creditor
Debtor
CSM Bank
bank

- 16 -
 Direct Debit Cancellation Flow

Pre-notification D-14CD

Creditor
Debtor

Cancel
Pain 008

Pacs 003
Pacs 003

Pacs 006 Pacs 006

Creditor
Debtor
CSM Bank
bank

- 17 -
 Direct Debit Refusal/Reject Flow

Pre-notification D-14CD

Creditor
Debtor

Pain 008 Pain 002

Refusal

Pacs 003
Pacs 003

Pacs 002 Pacs 002 Creditor

Debtor
CSM Bank
bank

- 18 -
 Direct Debit Refund/Return Flow

Pre-notification D-14CD

Creditor
Debtor

Pain 008 Pain 002

Refund

Pacs 003
Pacs 003

Pacs 004 Pacs 004 Creditor

Debtor
CSM Bank
bank

- 19 -
 Direct Debit Reversal Flow

Pre-notification D-14CD

Creditor
Debtor

Reversal
Pain 008

Pacs 003
Pacs 003

Pacs 007 Pacs 007 Creditor

Debtor
CSM Bank
bank

- 20 -