There are several reasons why a payment can fail in Source IPS, Destination IPS and in Nexus. For example:
- Messages are lost in transmission
- Messages are (erroneously) marked as duplicate
- Messages fail technical validation
- Payment processing reverts to manual handling
- Banks are unavailable
When payments are reversed, they are reversed against the exchange rate that applied to the original payment.
If the positive response of Source Gateway to the payment instruction is late, not received, or settlement fails, the Source IPS will inform Source Bank as well as Nexus of the failed settlement.
Payments may fail at the Destination IPS, despite the pre-validation checks. For example, messages could get lost or arrive late, the Destination Liquidity Provider may have sufficient liquidity. In cases where the Account Validation process is unable to confirm the status of the Recipient’s account, the account may turn out to be dormant or frozen. All these reasons are rare but still need to be handled by the service. All these scenarios lead to a reverse of the original leg, which is shown in the flow below.