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Exploiting the value of extended remittance information

I sat in on an interesting case study discussion at the London SWIFT business forum last week about the use of extended remittance information (ERI) to improve automation of accounts receivable and payable.

HSBC, BNP and Orange spoke about a successful proof of concept they carried out which demonstrated the value of using ISO XML messages (specifically Swift Bank-to-Customer Cash Management messages โ€“ CAMT 52, 53 and 54 message IDs) passed over Swift to carry more remittance information than is possible across existing bank infrastructures. Clearing systems are often restricted to just 18 characters of information. Even the modern SEPA system allows just 140 characters โ€“ good enough for Twitter, but not fit for purpose in the remittance world.

Payments that are stripped of valuable remittance information as they pass through the banking system make it difficult for corporates to reconcile the receipt to the invoice. This presents a challenge for Orange which receives high volumes of payments from its customers.

Seeing an opportunity to improve the process, Orange, HSBC and BNP carried out a proof of concept whereby the corporate remitter (the company paying the invoice) sends a rich XML payment instruction that is split into two.  The payment itself goes through the existing banking system to create the cash movement. The rich XML remittance information is sent over Swift to the corporate. The sending and receiving banks collaborate to ensure the file exchange works and make use of the CAMT messages to pass on the ERI. This allows Orange to more easily identify what the bank receipt of funds relates to, essentially by matching the payment to the rich CAMT message key identifiers, such as invoice number and reference in the incoming message. 

While there are still some issues to be resolved around the difficulty of packing and unpacking messages as they enter and exit the banking infrastructure, the success of the trial shows there is now a very real opportunity for all involved to repeat the process and roll it out more widely. There was also a call to action for other banks to join this collaboration. The arguments are compelling: corporates will benefit from the automation of their cash allocation process, while banks gain an ability to charge for the added value whilst retaining their existing payment systems.

In my view this all sounded as though it should have happened 20 years ago but I guess it is progress. Perhaps this time it will be the ISO XML message and Swift that facilitate a step change, so long as the parties are on Swift, the chosen banks support the messaging and parties can handle XML.

Splitting a message into two parts and routing the payment and information separately is a workaround, which causes most of the remittance headache globally.  A better solution is to keep the information firmly together (which Amazon and Ebay achieve) but until such time as the banking system is overhauled these workarounds will have to remain.

The corporate world of matching and reconciliation certainly needs an overhaul, with new technology to assist the drive for automation and control, especially in the shared service centre world. Any improvement to the messaging of remittance information is progress โ€“ so adoption of the concepts in the case study can only help.

These developments should also pave the way to reducing the reliance on spreadsheets as the tool of choice for matching and reconciling payments, which has got to be good for the industry as a whole.


Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 14 May, 2014, 19:45Be the first to give this comment the thumbs up 0 likes

Agreed. Your figure of 18 characters resonates totally with my personal experience. As I'd highlighted in my post titled How Usability Can Increase Adoption of Internet Banking on my personal blog, I wanted to enter "MCS MERIDIAN CLIENT ACCOUNT" in the payee field of the payment instruction but my bank - a Top 5 UK Bank - would only permit a narration as long as "MCS MERIDIAN CLTAC" which is exactly 18 characters. However, another Top 10 UK Bank was able to accept my full narration. Maybe some banks did implement a workaround several - if not 20 - years ago, considering my post is from 2008.

Chris Errington
Chris Errington - None - London 15 May, 2014, 14:08Be the first to give this comment the thumbs up 0 likes

Unfortunately, even when you can enter more than 18 characters there is no certainty that the extended information will make it through the next phases of payment.  Even more frustrating when you are allowed to enter the information as though it will be transmitted, only for it to be lost before it reaches the receiver.

Chris Errington

Chris Errington



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01 Apr 2011



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