Process documentationBasic Cross-Border STP Locate this document in the navigation structure

 

You can use this process in the context of end-to-end processing of cross-border payments to:

  • Validate incoming payment orders in the form of SWIFT message type MT103+

  • Determine the payment transaction chain

  • Calculate charges

  • Route payments to the next financial institution in the transaction chain

  • Perform clearing and settlement

Prerequisites

  • You have defined the checks run during enrichment and validation and checked the settings of checks specific to cross-border payment processing in Customizing for Payment Engine under:

    •   Payment Order   Payment Order Enrichment & Validation   Maintain Enrichment & Validation Check Set Rules  

    •   Payment Order   Payment Order Enrichment & Validation   Maintain Enrichment & Validation Checks  

    •   Payment Order   Payment Order Enrichment & Validation   Maintain Enrichment & Validation Sets for Order Types  

    •   Payment Items   Maintain Enrichment and Validation Set for Payment Items  

    •   Payment Items   Transaction Types and Transaction Type Groups  

  • You have managed service level agreements on the SAP Easy Access screen by choosing   Payment Engine   Master Data   Service Level Agreements   Manage Service Level Agreement   (transaction /PE1/SLA). For more information, see Service Level Agreement and Managing Service Level Agreements.

  • You have assigned charges to service level agreements and clearing agreements. For more information, see Charges.

  • You have uploaded and managed standard settlement instructions. For more information, see Upload of Referential Data (SSI).

Process

  1. You upload a payment order to the system over the Payment Order Interface of SWIFT message type MT103+.

  2. The system converts the MT103+ message to the Payment Engine metaformat.

  3. To ensure that the information in the MT103+ message is mapped to the Payment Engine metaformat correctly, the system performs the enrichment and validation process.

Enrichment and Validation

  1. The system reads the payment order.

  2. The system determines the transaction chain based on the ordering BIC, the beneficiary BIC, and the transaction currency.

    If Payment Engine is the first institution in the transaction chain, the system enriches the transaction chain of the payment; otherwise, the incoming SWIFT message already contains the transaction chain and the converter fills the fields. For more information about the determination of the transaction chain, see Standard Settlement Instructions (SSI).

  3. If the ordering institution and the beneficiary institution have a direct account relationship, only two BICs are returned, that is, the first institution and the last institution in the transaction chain; otherwise, the intermediary institution(s) are also returned.

    Note Note

    If the return structure is empty, the two institutions are not able to exchange messages. In this case, the enrichment and validation check was not successful and exception handling is triggered. For more information about exception handling, see Exception Control (FS-PE-EH).

    End of the note.

  4. The system calculates the charges for the customers in the payment transaction.

    To determine the correct charge amount, it checks the:

    • Charge condition group

    • Bank identifier code (BIC)

      Note Note

      If the charge has to be determined for the ordering party item, the BIC of the beneficiary is relevant. If the charge for the recipient item has to be determined, the BIC of the ordering party institution (reference account data of the recipient item) is relevant.

      End of the note.

    • Charge category

    • Transaction currency

    • Transaction amount

    • Validity date

  5. The system retrieves the charge amount from the charge catalog, which is currently stored in the Financial Conditions component. For more information, see Charges.

    Note Note

    If a charge provider other than Financial Conditions is used to handle charges, you must implement an additional enrichment and validation check. In Customizing, you implement a method to calculate the charges for a payment transaction based for the specific charge provider.

    End of the note.

  6. The system validates the charges that are sent from the previous bank in an MT103+ message.

    Note Note

    This check is only necessary for the charge category OUR and when the financial institution running Payment Engine is not the first financial institution in the transaction chain.

    End of the note.

    Note Note

    If the charges are not correct, exception handling is triggered.

    End of the note.

For more information about enrichment and validation checks, see Enrichment and Validation Checking.

Route Processing

  1. The system determines the route and the clearing agreement.

    Note Note

    The system uses the receiver BIC of the next message defined in the rule sets of routes and clearing agreements to determine the route and the clearing agreement

    End of the note.

  2. The system routes the payment item to the beneficiary and to an intermediary institution in the transaction chain.

For more information about the routing process, see Routing Control (FS-PE-RP).

Clearing and Settlement

  1. The system determines the bilateral agreed charges that have to be sent to the direct correspondent institution by retrieving the charge condition group from the clearing agreement.

  2. The system uses the charge condition group to determine the charges defined in the charge catalog.

  3. In a BEN scenario, the system reduces the settled amount by adding the charges to be debited to the clearing item. It therefore also reduces the amount of the recipient item by subtracting the charge accrued for the ordering party item from the transaction amount.

    Note Note

    Any change to the original amount is logged in an application log.

    End of the note.

  4. In an OUR scenario, the system increases the amount by adding the charges to be credited, which are bilaterally agreed on by two financial institutions, before finally posting the clearing item.

More Information

Cross-Border Payment Processing