Settlements through payment systems

Payment system: an association of banks and other participants that transfer money under common rules through a settlement center. In Russia, the concept is set out in the law on the national payment system (Federal Law No. 161-FZ). In everyday speech the term also covers card networks and e-wallets, but for a company’s payment abroad other mechanisms matter.

What takes part in an international payment

A company’s payment to a supplier usually passes through a chain of banks. Different mechanisms work on different legs:

• messaging networks. SWIFT and SPFS pass instructions between banks but do not move the money themselves;
• correspondent accounts. The money is actually debited and credited through the accounts banks hold with each other;
• national settlement systems. On the last leg, the payment often completes inside the system of the beneficiary’s country or currency: CIPS for the yuan, SEPA for the euro in Europe, CHIPS for large dollar settlements.

Consumer money transfer services are usually not suitable for paying for imports under a contract. They are designed for private individuals and small amounts and do not provide the documents that currency control expects.

What to watch for

What matters to a company is not the system as such, but a working route: from your rouble account to the beneficiary’s bank. The route depends on the currency, the country, the supplier’s bank and which links between banks are working right now. The same payment goes through on one route and comes back rejected on another.

Before paying, check which currency the supplier accepts, which bank details are on the invoice and whether an intermediary bank is needed.

A broker chooses not a system, but a path for a specific payment. We compare which agents in our pool handle this destination on the payment date and what it will cost. The rate and the fee are written in the payment order before the roubles are debited. How this is set up: Route selection.