Time-critical and non-time critical payments

For every cross-border payment, a Destination PSP must screen the Sender and Recipient against the sanctions lists applicable in that jurisdiction. However, not all PSPs are able to do this instantly:

• Some banks have legacy screening systems that screen payments after the funds have been received by the bank, but before they credit those funds to the recipient. These systems may not be technically capable of making a decision quickly enough (ie within the timeout / maximum execution time of the domestic IPS system)

• For other banks, even if they can perform an initial screen on the payment “instantly”, they may not be able to resolve any alerts without manual intervention, which cannot be done instantly.

Screening software typically generates a high number of false alerts. To avoid PSPs simply rejecting any payment that triggers an alert (and therefore rejecting a large number of legitimate payments), Nexus allows for payments to be flagged as time-critical or non-time critical:

Time-critical payments

Time-critical payments include urgent payments and point-of-sale payments (eg where the Sender is standing in a shop, waiting for a payment to complete before they can leave):

1. The Source PSP should set the pacs.008 instruction priority to HIGH (pacs.008 element /Document/FIToFICstmrCdtTrf/CdtTrfTxInf/PmtTpInf/InstrPrty/ )

2. Within the timeout SLA of the Destination IPS, the Destination PSP must either:

   1. Accept the payment and credit it to the Recipient, OR

   2. Reject the payment

Non-time critical payments

Payments should be non-time critical if it is acceptable for the payment to be slightly delayed in the case that the sanctions screening process triggers an alert (false or otherwise). In many cases, a potential delay might be preferable to the payment being rejected outright by the Destination PSP.

1. The Source PSP should set the pacs.008 instruction priority to NORM (pacs.008 element /Document/FIToFICstmrCdtTrf/CdtTrfTxInf/PmtTpInf/InstrPrty/ )

2. Within the technical timeout of the Destination IPS, the Destination PSP must respond with a pacs.002 with status:

   • ACCC – accepted and credited to recipient

   • RJCT – rejected

   • ACWP – accepted without posting to the Recipient’s account

Note that the Destintion PSP must still respond with a status within the timeout of the Destination IPS (typically 30 seconds or less), so the Sender will still have certainty about the status of the payment.

If the Destination PSP responds with the status code ACWP, the Destination IPS will still credit the funds to the Destination PSP, but the Destination PSP will not immediately credit funds to the Recipient.

From Nexus's perspective, all payment processing through the IPSs is now complete. But further steps are required to update the Sender on the final status of the payment.

3. If the Destination PSP responds with ACWP, then within the time limit set in the Nexus Scheme Rulebook, the Destination PSP must respond with:

• ACCC – funds now credited to the recipient

• BLCK – funds blocked and will not be returned (due to suspicious or illicit activity)

• RJCT – payment rejected (in case the Destination PSP could not resolve the case within the SLA)

  • In this case, the Destination PSP will issue a pacs.004 to return the funds

Time limit on processing non-time critical payments

The Nexus Scheme Rulebook would define the maximum time in which an ACWP payment must be credited to the Recipient, blocked or rejected and returned.

We will engage with the industry to establish a reasonable time limit for processing ACWP payments. A trade-off needs to be made:

• A very short time limit will increase the number of legitimate payments that are rejected due to false alerts from sanctions screening.

• A very long time limit will ensure the greatest percentage of legitimate payments are ultimately successful, but at the expense of uncertainty for the Sender and Recipient

As more banks/PSPs transition to real-time, API-based sanctions screening software, the average time required for resolving alerts should fall. If so, the Nexus Scheme could also reduce the time limit for processing ACWP payments.