secure bank transfers

MT202 SWIFT Explained: Bank-to-Bank Transfers, Benefits, and Differences from MT103

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What is MT202 SWIFT?

The MT202 is a standardized format used for transferring funds between financial institutions through the SWIFT network. This format is primarily utilized for bank-to-bank transfers, which include moving funds between different banks or branches of the same bank.

When is MT202 Used?

MT202 is generally used in the following scenarios:

  • Interbank transfers, such as moving funds between correspondent banks.
  • Settling payments that involve multiple financial institutions.
  • Facilitating payments in the context of clearinghouses and exchanges.

Benefits of Using MT202

  1. Efficiency: It facilitates smooth and efficient transfers of funds between banks.
  2. Security: Transfers are conducted over the secure SWIFT network, reducing the risk of fraud.
  3. Standardization: The globally accepted format ensures consistency in interbank transactions.
  4. Tracking: Each MT202 has a unique reference number, allowing for easy tracking of the transaction status.
  5. Cost-Effective: It reduces the operational costs involved in interbank transfers by streamlining processes.

Differences Between MT103 and MT202

  • Purpose:
    • MT103: Used for customer credit transfers, meaning funds transfer from one customer to another, possibly in different countries.
    • MT202: Used for financial institution transfers, meaning funds transfer between banks or within different branches of the same bank.
  • Information Included:
    • MT103: Contains detailed information about the ordering customer and the beneficiary customer, including names, addresses, and account numbers.
    • MT202: Contains information about the transferring banks and the transfer details, but not about individual customers.
  • Usage Context:
    • MT103: Used for customer-driven transactions.
    • MT202: Used for bank-driven transactions.

MT202 SWIFT Format Explained

The MT202 message consists of several fields, each identified by a number and preceded by a colon. Here’s a breakdown of some key fields:

  • Field 20: Transaction Reference Number
  • Field 21: Related Reference
  • Field 32A: Value Date, Currency Code, Amount
  • Field 52A: Ordering Institution
  • Field 53A: Sender’s Correspondent
  • Field 54A: Receiver’s Correspondent
  • Field 58A: Beneficiary Institution

Sample MT202 SWIFT Copy

Here’s an example of a typical MT202 message:

{1:F01BANKBEBBAXXX1234567890}{2:O2021205050406BANKDEFFAXXX22221234560504061205N}{4:
:20:1234567890
:21:9876543210
:32A:210504USD1000,00
:52A:BANKBEBB
:53A:BANKUS33
:54A:BANKJPJT
:58A:BANKDEFF
-}

Explanation of the Sample Format

  • Field 20: 1234567890 – Transaction Reference Number
  • Field 21: 9876543210 – Related Reference
  • Field 32A: 210504USD1000,00 – Value Date (2021-05-04), Currency Code (USD), Amount (1000.00)
  • Field 52A: BANKBEBB – Ordering Institution (Bank B, Belgium)
  • Field 53A: BANKUS33 – Sender’s Correspondent (Bank C, USA)
  • Field 54A: BANKJPJT – Receiver’s Correspondent (Bank D, Japan)
  • Field 58A: BANKDEFF – Beneficiary Institution (Bank E, Germany)

This format ensures that all necessary details for the transfer are included, enabling efficient and secure interbank fund transfers.

You can also check out below Youtube video for better clarity –