Processing payments
Payment Processing as a SAP
To understand how payments are processed in Nexus, please see the Flow of funds in Nexus and Detailed messaging and processing. SAPs should pay special attention to two points:
When acting as Source SAP for a specific payment, the SAP should:
Screen the Sender and Recipient of the payment against the sanctions lists applicable in the SAP’s jurisdiction.
Accept (or reject) the payment as they would a normal domestic payment.
When acting as the Destination SAP, the payment is noticeably different from a domestic payment:
The Destination SAP will receive a Nexus pacs.008 payment instruction from the Destination IPS. The D-SAP must:
review this pacs.008, confirm that the FXP’s account (specified in the pacs.008) has sufficient funds, and
screen the Sender and Recipient against the sanctions lists that apply in the D-SAP’s jurisdiction.
If the D-SAP is happy to proceed, it must submit the pacs.008 to the D-IPS (in the same way it would submit a domestic payment instruction)
If the D-SAP is not happy to proceed, it should respond to the D-IPS with a pacs.002 with a RJCT status code to confirm that the payment will not be processed. (The D-IPS will then communicate with Nexus to reverse the payment.)
Screening
Each SAP must:
Screen the Sender and Receiver against the sanctions lists applicable in the SAP‘s jurisdiction.
If the SAP receives a positive match against the sanctions lists, they may use the Request-for-Information [LINK TO SECTION] process to request further information from the Source PSP or Destination PSP.
They can use any additional information provided to re-screen or to confirm whether the initial hit was a true or false positive.
In the case of a true positive match, the SAP should reject the payment with a pacs.002 with a RJCT status code.
In the case that no further information is available, the SAP must decide whether to accept or reject the payment and should confirm their decision to Nexus through the pacs.002 message. (Unlike Destination PSPs, SAPs are currently not permitted to take extra time to complete sanctions screening.)
In the case of no match or a false positive match, the SAP should accept the payment by returning the Nexus pacs.002 message with an ACCC status code.
PSPs that don’t support real-time sanctions screening, are not able to act as SAPs (because they will introduce delays into every payment).
Managing liquidity
It is the FXP's responsibility to ensure it manages its liquidity and ensure it is always able to process payments. Nexus assumes that FXPs who have active rates hold sufficient funds to honour payments against those rates.
SAPs are responsible for managing their own liquidity in the IPS to ensure that payments on behalf of their client FXPs can always be made.
Nexus will support FXPs to manage their liquidity by informing FXPs immediately after each payment is processed.
When Nexus successfully processes a payment which references an FXP’s quote, Nexus will send a notification to the FX Provider. These notifications allow the FXP to update their internal records and monitor the balance of each of their accounts. (See [FX GUIDE – FXTR17 NOTIFICIATIONS] for further detail.)
The FXP is responsible for processing these notifications in order to update their internal systems to keep track of their liquidity and taking any action as required to manage that liquidity.
An FXP may be penalized if payments against their quotes fail because of a lack of liquidity in their account at a Settlement Account Provider (or their settlement account, if they are a member of the IPS). It is best practice for a Destination SAP is likely to check the balance of the FXP’s account before approving or reject payments that reference the FXP’s quote.
Managing liquidity when markets are closed
As Nexus payments can be made 24/7, including weekends, SAPs must ensure that their liquidity management considers payment flows that may occur out of normal business hours.
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