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MT103 vs MT202: What’s the Difference?
MT103 and MT202 are both SWIFT message formats used in international payments, but they serve different purposes, MT103 vs MT202 difference guide.
MT103 vs MT202: What’s the Difference?
MT103 vs MT202 difference
—MT103 is used for customer transactions, such as sending or receiving international payments.
—MT202 is used to transfer funds between banks and does not involve individual customers.
As a customer, you will primarily be dealing with MT103 messages when sending or receiving international payments. MT202 messages are used internally by banks to transfer funds among themselves, so they do not concern individual customers.
The table below summarises the differences between MT103 and MT202.
MT103: Mt103 purpose is for customer payments specifically individuals and businesses, customer details are included.
MT202: mt202 purpose is bank to bank transfers, specifically for banks only and customer’s details are not included.
To further break it down, the following are the plain explanations for the purpose and functions.
- Interbank Fund Transfers: The primary function of an MT202 is to transfer funds between banks.
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Covering MT103s:It acts as a “cover” message for customer-initiated payments (like an MT103 message) by communicating the underlying fund movement without revealing sensitive customer details to intermediary banks.
- Audit Trail: It creates an important audit trail for tracking funds as they move between financial institutions during international payments.
- Settlement Process: It’s used in the settlement process between banks and for liquidity adjustments within their own accounts.
Messaging Type Key Characteristics
- Bank-to-Bank: The message is strictly for communication between financial institutions, not directly involving individual customers.
- Customer Information: Unlike an MT103, an MT202 does not carry customer-specific details.
- Regulatory Compliance: The MT202 COV (Cover) variant specifically separates sensitive customer data to help meet regulatory standards such as anti-money laundering (AML) and know your customer (KYC) requirements.
MT103 vs MT202 difference
Why It Matters
Security: By separating customer details, it enhances the security and confidentiality of cross-border payments.
Efficiency: It speeds up the payment process by allowing intermediary banks to focus on fund transfers without needing to handle customer-specific information.
Transparency: Although customers may not see the MT202, the information it carries helps ensure transparency in the overall payment chain.
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