GLOBAL PAYMENTS KNOWLEDGEISO 20022 / SWIFT / SEPA / MT / MX
PAYMENTSSIGNAL

The interactive academy for the standards, messages, and rails that move money.

GET IN TOUCH
SWIFT MT CORRESPONDENT

Wrong account number abroad: a returned MT103

Trigger: Cassia Bank cannot apply the credit — the beneficiary account number in the MT103 does not exist on its books.

Contributor Shubham Mathure

What operations sees first: Days after the outbound payment, an unexpected inbound MT103 with /RETN/ in field 72 arrives, and the nostro shows the money coming back — sometimes less correspondent charges.

WHERE IS THE MONEY?

Debited from the customer at the start; in transit across correspondent accounts for the round trip; back with the customer after the return, possibly net of charges.

DID SETTLEMENT HAPPEN?

Each leg settled across correspondent accounts as it happened, and the return settled the same way in the opposite direction. Nothing was reversed — value moved twice.

WHO ACTS NEXT?

Cassia Bank (beneficiary bank) Bank Alfa asks the customer to confirm the beneficiary's account number and weighs pre-validation checks for that corridor to catch bad account data before sending.

PLAY THE EXCEPTION

Trigger: The beneficiary account number in the MT103 does not exist at Cassia.

STEP 1 / 13MESSAGE

The customer orders a USD transfer abroad

Ordering customer → Bank Alfa (ordering bank)

The ordering customer instructs Bank Alfa to pay a supplier banked at Cassia Bank in another country. Bank Alfa has no direct account relationship with Cassia — that is why correspondents exist.

Step 1 of 13: The customer orders a USD transfer abroad

  1. 01Message
    The customer orders a USD transfer abroadOrdering customer → Bank Alfa (ordering bank)
  2. 02Processing
    Bank Alfa validates and screensBank Alfa (ordering bank)
  3. 03Posting
    The customer's account is debitedBank Alfa (ordering bank)
  4. 04Message
    The MT103 goes to Bank Alfa's USD correspondentBank Alfa (ordering bank) → Meridian Bank (correspondent) · MT103
  5. 05Processing
    Meridian validates and screens in the middleMeridian Bank (correspondent)
  6. 06Settlement
    Money moves across the books of MeridianMeridian Bank (correspondent)
  7. 07Message
    Cassia is advised its nostro was creditedMeridian Bank (correspondent) → Cassia Bank (beneficiary bank) · MT910
  8. 08Message
    The MT103 continues serially to CassiaMeridian Bank (correspondent) → Cassia Bank (beneficiary bank) · MT103
  9. 09Processing
    Cassia validates the incoming paymentCassia Bank (beneficiary bank)
  10. 10 · EXCEPTION PATHProcessing
    Cassia cannot apply the fundsCassia Bank (beneficiary bank)
  11. 11 · EXCEPTION PATHMessage
    Cassia returns the paymentCassia Bank (beneficiary bank) → Meridian Bank (correspondent) · MT103
  12. 12 · EXCEPTION PATHSettlement
    Meridian books the money backMeridian Bank (correspondent)
  13. 13 · EXCEPTION PATHPosting
    The ordering customer is re-creditedBank Alfa (ordering bank)
  14. OUTCOME
    Funds
    Back with the ordering customer (charges may have been deducted along the way).
    Settlement
    Each hop settled and was then unwound by an equally settled return.
    Who acts next
    Cassia Bank (beneficiary bank) — The customer verifies the beneficiary's account number before re-sending.
Full step-by-step text (works without JavaScript)
  1. 01Message
    The customer orders a USD transfer abroadOrdering customer → Bank Alfa (ordering bank)

    The ordering customer instructs Bank Alfa to pay a supplier banked at Cassia Bank in another country. Bank Alfa has no direct account relationship with Cassia — that is why correspondents exist.

  2. 02Processing
    Bank Alfa validates and screensBank Alfa (ordering bank)

    Format and balance checks plus sanctions screening. Cross-border payments face stricter screening because more jurisdictions are involved.

    Screening checkpoint: Outbound cross-border screening — Ordering and beneficiary parties, banks, and remittance text are screened before the payment leaves.

  3. 03Posting
    The customer's account is debitedBank Alfa (ordering bank)

    Bank Alfa books the debit and, per the charge option, any fees.

    • DR Ordering customer's account at Bank Alfa — USD 250,000.00
  4. 04Message
    The MT103 goes to Bank Alfa's USD correspondentBank Alfa (ordering bank) → Meridian Bank (correspondent) · MT103

    In the serial method the payment instruction itself travels through the account chain. Meridian holds Bank Alfa's USD account (Bank Alfa's nostro), so Meridian can debit it.

  5. 05Processing
    Meridian validates and screens in the middleMeridian Bank (correspondent)

    Every bank in the chain screens independently. Meridian also checks that Bank Alfa's account has cover for the debit.

  6. 06Settlement
    Money moves across the books of MeridianMeridian Bank (correspondent)

    Both Bank Alfa and Cassia hold USD accounts at Meridian. Settlement here is a book transfer in commercial bank money: Meridian debits one account it holds and credits the other.

    No clearing house is involved — the correspondent's ledger is the settlement venue. This is settlement in commercial bank money, not central bank money.

    • DR Bank Alfa's USD account at Meridian (vostro) — USD 250,000.00
    • CR Cassia's USD account at Meridian (vostro) — USD 250,000.00
  7. 07Message
    Cassia is advised its nostro was creditedMeridian Bank (correspondent) → Cassia Bank (beneficiary bank) · MT910

    The MT910 credit confirmation lets Cassia's reconciliation match expected funds against its nostro account movement.

  8. 08Message
    The MT103 continues serially to CassiaMeridian Bank (correspondent) → Cassia Bank (beneficiary bank) · MT103

    Meridian forwards the payment instruction to the beneficiary bank with the full ordering and beneficiary details intact.

  9. 09Processing
    Cassia validates the incoming paymentCassia Bank (beneficiary bank)

    Account checks and inbound screening. Only when funds are confirmed on the nostro and checks pass is the beneficiary credited.

  10. 10 · EXCEPTION PATHProcessing
    Cassia cannot apply the fundsCassia Bank (beneficiary bank)

    The account number fails validation. The nostro money has already arrived, so it must travel back the way it came.

  11. 11 · EXCEPTION PATHMessage
    Cassia returns the paymentCassia Bank (beneficiary bank) → Meridian Bank (correspondent) · MT103

    A return payment referencing the original transaction, with the reason recorded in the sender-to-receiver information, goes back via the same correspondent.

  12. 12 · EXCEPTION PATHSettlement
    Meridian books the money backMeridian Bank (correspondent)

    The return settles the same way the original did — across the vostro accounts.

    • DR Cassia's USD account at Meridian (vostro) — USD 250,000.00
    • CR Bank Alfa's USD account at Meridian (vostro) — USD 250,000.00
  13. 13 · EXCEPTION PATHPosting
    The ordering customer is re-creditedBank Alfa (ordering bank)

    Bank Alfa credits the customer back, possibly minus deducted charges depending on the charge option, and tells them why the payment failed.

    • CR Ordering customer's account at Bank Alfa — USD 250,000.00
  14. OUTCOME
    Funds
    Back with the ordering customer (charges may have been deducted along the way).
    Settlement
    Each hop settled and was then unwound by an equally settled return.
    Who acts next
    Cassia Bank (beneficiary bank) — The customer verifies the beneficiary's account number before re-sending.

THE TIMELINE

  1. 01Ordering customer
    Instructs a cross-border USD payment; Bank Alfa debits the customer's account.
  2. 02Bank Alfa
    Sends the MT103 serially to its USD correspondent, Meridian Bank.MT103
  3. 03Meridian Bank
    Books the transfer across the accounts it holds and forwards the MT103 to Cassia Bank.MT103
  4. 04Cassia Bank
    Validation fails — the beneficiary account number does not exist.

    In the MT world there is no scheme-defined return message: funds travel back as a new MT103, flagged as a return by convention.

  5. 05Cassia Bank
    Returns the funds via the correspondent chain with /RETN/ in field 72, referencing the original payment so the receiver can match it.MT103
  6. 06Meridian Bank
    Confirms the credit of the returned funds to Bank Alfa's nostro account.MT910
  7. 07Bank Alfa
    Matches the return to the outgoing payment and re-credits the customer — possibly reduced by correspondent charges.

Resolution: The money comes back as a fresh, settled payment flagged as a return under the SWIFT reject/return convention. Matching depends on references and the /RETN/ codeword in field 72 — there is no scheme guarantee of speed, and charges may be deducted along the way.

MESSAGES INVOLVED

LEARN THE CONCEPTS

Sources for this scenario2
  1. Official requirement

    Swift Standards MT (annual standards releases) ↗ — Swift · field 72 reject/return conventions

    Defines the MT message standards (including MT101, MT103, MT202/202 COV, and the MT9xx statement messages) exchanged over the Swift FIN network, maintained through annual standards releases. · Checked 2026-07-12

    Full field-level specifications live in the Swift Knowledge Centre User Handbook behind a swift.com login; content here relies on public summaries. Swift ended MT-to-ISO 20022 coexistence for in-scope cross-border payment instructions (for example MT103 and MT202) in November 2025; MT statement messages are being phased out on a separate timeline.

  2. Simplified educational illustration

    Payments Signal editorial teaching models — Payments Signal

    This site's own simplified teaching models. · Checked 2026-07-12

    What this simplifies: Single-correspondent chain; institution-specific handling varies.

    Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.