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

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

GET IN TOUCH
FOLLOW THE PAYMENT

SWIFT cover payment (MT103 + MT202 COV)

The payment instruction travels directly to the beneficiary bank while the money takes the correspondent route as a cover transfer. The two must meet and match.

Reference card →
Your notes

Contributor Shubham Mathure

STEP 1 / 8MESSAGE

The customer orders a USD transfer abroad

Ordering customer → Bank Alfa (ordering bank)

Same starting point as the serial method — the difference is how Bank Alfa chooses to route instruction and money.

Step 1 of 8: 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, screens, and debitsBank Alfa (ordering bank)
  3. 03Message
    The MT103 goes directly to CassiaBank Alfa (ordering bank) → Cassia Bank (beneficiary bank) · MT103
  4. 04Message
    The cover transfer goes to the correspondentBank Alfa (ordering bank) → Meridian Bank (correspondent) · MT202 COV
  5. 05Settlement
    Meridian settles the cover across its booksMeridian Bank (correspondent)
  6. 06Message
    Cassia sees the cover arrive on its nostroMeridian Bank (correspondent) → Cassia Bank (beneficiary bank) · MT910
  7. 07Processing
    Cassia matches the announcement against the coverCassia Bank (beneficiary bank)
  8. 08Posting
    The beneficiary is creditedCassia Bank (beneficiary bank)
MESSAGECLEARING OBLIGATIONSETTLEMENTPOSTING
Full step-by-step text (works without JavaScript)
  1. 01Message
    The customer orders a USD transfer abroadOrdering customer → Bank Alfa (ordering bank)

    Same starting point as the serial method — the difference is how Bank Alfa chooses to route instruction and money.

  2. 02Processing
    Bank Alfa validates, screens, and debitsBank Alfa (ordering bank)

    After checks and screening, the customer's account is debited and the bank decides on the cover method: announce directly, pay through correspondents.

    • DR Ordering customer's account at Bank Alfa — USD 250,000.00

    Screening checkpoint: Outbound cross-border screening — Both the announcement and the cover leg will be screened by every bank that touches them.

  3. 03Message
    The MT103 goes directly to CassiaBank Alfa (ordering bank) → Cassia Bank (beneficiary bank) · MT103

    The beneficiary bank learns the full payment details immediately — who is paying whom, how much, and why. But this message alone brings no money.

  4. 04Message
    The cover transfer goes to the correspondentBank Alfa (ordering bank) → Meridian Bank (correspondent) · MT202 COV

    The MT202 COV moves the money along the account chain. Its sequence B repeats the underlying customer details so every bank in the chain can screen the real parties.

  5. 05Settlement
    Meridian settles the cover across its booksMeridian Bank (correspondent)

    As in the serial flow, settlement is a book transfer between the two banks' USD accounts held at Meridian.

    • 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
  6. 06Message
    Cassia sees the cover arrive on its nostroMeridian Bank (correspondent) → Cassia Bank (beneficiary bank) · MT910

    The credit advice tells Cassia the money side is complete. Now it has both halves: instruction and funds.

  7. 07Processing
    Cassia matches the announcement against the coverCassia Bank (beneficiary bank)

    The beneficiary bank pairs the MT103 with the incoming cover by references and amount. Crediting on the MT103 alone would be paying before being paid.

  8. 08Posting
    The beneficiary is creditedCassia Bank (beneficiary bank)

    With instruction and funds matched, Cassia credits its customer. The cover method can be faster for the beneficiary bank's information, but credit still waits for money.

    • CR Beneficiary's account at Cassia — USD 250,000.00

What this simplifies: One correspondent carries the cover. Real flows may involve correspondents on both sides, FX, and charge deductions along the chain.

LEARN THE CONCEPTS BEHIND THIS FLOW

Sources for this flow3
  1. Official requirement

    Swift Standards MT (annual standards releases) ↗ — Swift

    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. Market practice

    Wolfsberg Group Payment Transparency Standards ↗ — The Wolfsberg Group

    Industry standards on preserving complete and accurate party information through payment chains, expressed in ISO 20022 terminology. · Checked 2026-07-12

    The 2023 standards replace the 2017 version and are supplemented by separate Wolfsberg guidance on roles and responsibilities in payment chains.

  3. 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 on the cover leg; real cover chains may pass through several banks on each side.

    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.