Tag: COVE settlement

pacs.008 Fields Explained in Simple English

When money is sent across borders under ISO 20022, banks use a structured message called pacs.008. In this article, we’ll have the pacs.008 fields explained for better understanding. This message is the ISO 20022 replacement for the old MT103 and is used for customer-to-customer international payments.

A pacs.008 contains two main parts:

  1. Group Header – Basic information
  2. Credit Transfer Transaction Information – The actual details of one payment

This post explains the second part, using simple language and clear examples anyone can understand.

Credit Transfer Transaction Information (Section B)

This section describes everything about one single payment:

  • Who is sending money
  • Who is receiving money
  • How much
  • Why
  • Which banks are involved
  • Who pays charges
  • How the transaction will settle

Below is a table showing each ISO 20022 field, a simple description, and a clear example.

Table explaining pacs.008 fields with descriptions and examples including settlement method.

Understanding Each Field (Plain English)

1. — Instruction Identification

A reference your bank creates to identify the payment internally.
Example: PKBR-2025-11-22-001

2. — End-to-End Identification

A reference that stays the same from sender to receiver.
Example: E2E-PKBK-908877

3. — Unique End-to-End Transaction Reference

A mandatory gpi tracking number used like a parcel tracking code.
Example: 55c1ca88-89f3-4e62-b3f5-112233445566

4. — Instructed Amount

Money the sender wants to transfer.
Example: USD 5,000.00

5. — Debtor

The customer sending the money.
Example: ABC Importers Ltd, Karachi

6. — Debtor Account

Sender’s account number or IBAN.
Example: PK49FAKE0000000123456789

7. — Debtor Agent

The sender’s bank.
Example: PKBAPKKXXXX

8. — Creditor

The customer receiving the money.
Example: Global Machinery GmbH, Munich

9. — Creditor Account

Receiver’s account number.
Example: 987654321

10. — Creditor Agent

The beneficiary’s bank.
Example: DEUTDEMMXXX

11. — Purpose Code

Reason for payment.
Example: CORT (Trade settlement)

12. — Remittance Information

What the payment is for.

  • Unstructured (simple text, 140 characters)
  • Structured (detailed invoice info, up to 9,000 characters)

Example:
Invoice 1217 for industrial pump

13. — Charge Bearer

Who pays the fees?

CodeMeaning
SHARShared charges
DEBTSender pays all
CREDReceiver pays all
SLEVSEPA rule

Example: SHAR

14. — Settlement Information (NEW SECTION ADDED)

Settlement Information tells how the payment will be settled between banks.

The most important element inside this block is:

— Settlement Method

This defines how the payment moves through the banking system.

ISO 20022 supports four values:

CodeMeaning
CLRGClearing system
COVECover method
INDAInstructed agent
INGAInstructing agent

Example Settlement Method:

INDA

This means the payment will settle directly through the instructed agent (the Creditor Agent).

This field is critical because it tells the receiving bank how to expect the funds.

Complete Real-World Example

A business in Karachi pays USD 5,000 to a supplier in Munich:

  • InstrId: PKBR-2025-11-22-001
  • EndToEndId: E2E-PKBK-908877
  • UETR: 55c1ca88-89f3-4e62-b3f5-112233445566
  • InstdAmt: USD 5,000.00
  • Dbtr: ABC Importers Ltd, Karachi
  • DbtrAcct: PK49FAKE0000000123456789
  • DbtrAgt: PKBAPKKXXXX
  • Cdtr: Global Machinery GmbH, Munich
  • CdtrAcct: 987654321
  • CdtrAgt: DEUTDEMMXXX
  • Purp: CORT
  • ChrgBr: SHAR
  • RmtInf: Invoice 1217 for industrial pump
  • SttlmMtd: INDA

This is exactly how the transaction appears inside a pacs.008 message.