Routing logic

Routing logic - Default

BC Connect has an "default routing logic" that automatically chooses the optimal rail for the execution of each payment. The chosen rail depends on the transaction amount, the reachability of the beneficiary, and which rails have been approved for your client ID.

Reach out to our your relationship manager or refer to your pricing agreement to learn which payment rails have been approved and activated for your client ID.

The "default routing logic" means that you do not need to worry about which payment rail to use for each payment - BC Connect will take care of that for you.

However, you also have the option of selecting the EUR payment rail yourself - read more about that functionality below.

Payment rail selection for EUR payments

For EUR payments, BC Connect have several payment rail options: SEPA Instant Credit Transfer, SEPA Credit Transfer, T2 (previously Target2) or via a correspondent bank.

As a default setup, we will always try to execute the payment according to the following priority if no Clearing Network value is present:

1. SEPA Credit Transfer
2. T2 (previously Target2)
3. Via a correspondent bank

Supported clearing network value: SEPAINST

You can specify SEPA Instant in the payment instruction, whereby we will disregard the priority above and attempt to execute the payment via SEPA Instant. If the beneficiary is not able to be reached by SEPA.

Instant, Banking Circle will then utilise the retry/re-route logic noted in the section below

With the default set up SEPA SCT will always be your first priority, unless otherwise instructed with the clearing network SEPAINST. If you have chosen SEPA CT as your default, you will not be able to instruct payments with SEPA as clearing network.

You can also request Relationship Manager to change your setup, so that we instead apply the following priority:

1. SEPA Instant Credit Transfer
2. SEPA Credit Transfer
3. T2 (previously Target2)
4. Via a correspondent bank

Supported clearing network value: SEPA

If you are on this alternative setup, you can specify SEPA Credit Transfer in the payment instruction using the value SEPA in clearing network, whereby we will disregard the priority above and only attempt to execute the payment via SEPA Credit Transfer. This can be advantage in cases, where you - for example based on previous rejections - know that the beneficiary's account is not enabled for SEPA Instant.

Supported clearing network value: T2

In addition to SEPAINST and SEPA, it is now possible to specify T2 as a clearing network for processing your single, bulk or correspondent payments. In this case, we will attempt to execute your payment via T2. If the beneficiary's account is not enabled for T2, the payment will get rejected and you will have to re-instruct the payment using another value for clearing network. Please note, this is currently not applicable for the payments initiated via pain001 or Single Payment Via the Client Portal.

Instructing the EUR payment rail

For single, agency and correspondent banking payment initiation endpoints, you can instruct the payment rail using the clearingNetwork parameter, where the only allowed values are SEPAINST (for SEPA Instant Credit Transfer) ,SEPA (for SEPA Credit Transfer) and T2 (for Target2).

For the bulk payment initiation endpoint, you can instruct the payment rail using column 27, where the only allowed values are SEPAINST (for SEPA Instant Credit Transfer), SEPA (for SEPA Credit Transfer) and T2 (for Target2).

For the pain.001 payment initiation endpoint, you can instruct the payment rail using the PaymentTypeInformation block with tagServiceLevelCode populated with SEPA (for SEPA Credit Transfer), and for SEPA Instant you will also have to populate tag LocalInstrumentCode with INST.

The PaymentTypeInformation block should be sent at PaymentInformation or CreditTransferTransactionInformation level.

Please note that ServiceLevelCode and LocalInstrumentCode must only be populated with the values specified above.

Payload examples:

 {
  "debtorAccount": {
    "account": "DK2789000049910133", 
    "financialInstitution": "SXPYDKKKXXX",
    "country": "DK"
  },
  "debtorViban": null,
  "debtorReference": "TEST",
  "debtorNarrativeToSelf": "SENDING TEST",
  "currencyOfTransfer": "EUR",
  "amount": {
    "currency": "EUR",
    "amount": "100"
  },
  "requestedExecutionDate": "2023-02-03",
  "clearingNetwork":"SEPAINST",
  "chargeBearer": "SHA",
  "remittanceInformation": {
    "line1": "Test1",
    "line2": "Test2",
    "line3": "Test3",
    "line4": "Test4"
  },
  "creditorId": null,
  "creditorAccount": {
        "account": "LU547050520635103630",
        "financialInstitution": "KBLXLULLXXX",
        "country": "LU"
  },
  "creditorName": "Beneficiary Name",
  "creditorAddress": {
    "line1": "Address 1",
    "line2": "Address 2",
    "line3": "Address 3",
    "line4": "Address 4"
  }
}

12387,DK7789000000000114,10,EUR,10,EUR,31032023,A,Financial Inst. Ltd.,LU547050520635103630,S,KBLXLULLXXX,,MESSAGE,,,,SHA,,,EUR,PRAJAKTATEST1,PRAJAKTA2,PRAJ3,FR - GRENOBLE 38100,N,SEPAINST

<?xml version="1.0" encoding="UTF-8"?>
<Document xmlns="urn:iso:std:iso:20022:tech:xsd:pain.001.001.03" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
	<CstmrCdtTrfInitn>
		<GrpHdr>
			<MsgId>PAYPURPCODE200A</MsgId>
			<CreDtTm>2023-03-21T10:48:11</CreDtTm>
			<NbOfTxs>1</NbOfTxs>
			<CtrlSum>50</CtrlSum>
			<InitgPty/>
		</GrpHdr>
		<PmtInf>
			<PmtInfId>PAYPURPCODE200B</PmtInfId>
			<PmtMtd>TRF</PmtMtd>
			<NbOfTxs>1</NbOfTxs>
			<CtrlSum>50</CtrlSum>
			<PmtTpInf>
				<SvcLvl>
					<Cd>SEPA</Cd>
				</SvcLvl>
				<LclInstrm>
					<Cd>INST</Cd>
				</LclInstrm>
			</PmtTpInf>
			<ReqdExctnDt>2023-03-28</ReqdExctnDt>
			<Dbtr>
				<Nm>TEST NAME</Nm>
			</Dbtr>
			<DbtrAcct>
				<Id>
					<IBAN>DK9389000000014376</IBAN>
				</Id>
			</DbtrAcct>
			<DbtrAgt>
				<FinInstnId>
					<BIC>SXPYDKKXXX</BIC>
				</FinInstnId>
			</DbtrAgt>
			<ChrgBr>SHAR</ChrgBr>
			<CdtTrfTxInf>
				<PmtId>
					<InstrId>TEST001</InstrId>
					<EndToEndId>TEST002</EndToEndId>
				</PmtId>
				<Amt>
					<InstdAmt>Ccy="EUR">10010.00</InstdAmt>
				</Amt>
				<Cdtr>
					<Nm>CreditorName</Nm>
					<PstlAdr>
						<Ctry>DE</Ctry>
						<AdrLine>AddressLine1</AdrLine>
						<AdrLine> AddressLine2</AdrLine>
						<AdrLine> AddressLine3 </AdrLine>
					</PstlAdr>
				</Cdtr>
				<CdtrAcct>
					<Id>
						<IBAN>DK9889000000021173</IBAN>
					</Id>
				</CdtrAcct>
				<RmtInf>
					<Ustrd>Remittance Line 1</Ustrd>
					<Ustrd>Remittance Line 2</Ustrd>
					<Ustrd>Remittance Line 3</Ustrd>
				</RmtInf>
			</CdtTrfTxInf>
		</PmtInf>
	</CstmrCdtTrfInitn>
</Document>

Note, that to successfully execute a payment via SEPA Instant, the following criteria must be met:

1. The transaction amount is within the SEPA Instant amount limit (currently EUR 100,000)
2. The beneficiary bank is SEPA Instant reachable
3. The beneficiary account is enabled for SEPA Instant

Identifying the payment rail

📘

Which payment rail was used for executing my payment?

You can find information about which rail was used for executing your payment in the property paymentRail, which is available in the GET single payments and GET single payment by ID endpoints, in the payload of the Webhooks notifications and in the reconciliation report.

The possible values of the paymentRail property matches what you will see on your invoice from us. Below is a list of the possible values - note that more values will be added continuously, as we add more payment rails to our capabilities:

• SEPA (SCT Inst)
• SEPA (SCT)
• SEPA Direct Debit
• SEPA Direct Debit - Rejection/Chargeback
• SEPA Direct Debit - Return/Chargeback
• SEPA Direct Debit - Reversal
• Faster Payments
• BACS
• BECS
• CHAPS
• CHATS
• Crossborder
• Target
• Kronos2
• Fedwire USD
• HUF-RTGS
• RIX-RTGS
• Internal
• Own
• MT202
• Local Clearing CHF
• Local Clearing CZK
• Local Clearing DKK
• Local Clearing HUF
• Local Clearing NOK
• Local Clearing PLN
• Local Clearing RON
• Local Clearing SEK
• Local Clearing SGD
• RIX-Instant
• NPP AUD Instant

Retry and re-route automation of SEPA Instant payments

SEPA Instant payments initiated via the singles and bulk (bulk file with less than 10 instructions) API endpoint will be automatically retried or re-routed if a payment is not SEPA Instant eligible. The automatic retry/re-route is implied for payment instructions with upfront network rail selection as “SEPAINST”.

Process Workflow:

The detailed process flow works the following:
1. Insert “SEPAINST” as the network rail selection and populate other payment details.
2. Checks done by BC if the payment is SEPA Instant eligible.
3. If “No” the payment will automatically be re-routed via SEPA SCT at the same cost.
4. If “Yes” with no rejections, the payment will be processed via SEPA Instant.
5. If “Yes” but a soft rejection is received from scheme, the payment will be retried on SEPA Instant for several times in a maximum two and a half hours period and payment status will remain in “Pending Processing” until processed via SEPA Instant. If not possible via SEPA Instant, this will be Rejected.
6. If “Yes” but a hard rejection due to re-route reasons received from the scheme, the payment will be automatically re-routed and processed via SEPA SCT.
7. If “No” and a hard rejection due to beneficiary fundamental account issues is exposed, then the payment will be Rejected back to the client and not processed via any scheme.

And this means,

If the payment instruction is eligible for SEPA Instant

The payment will be processed via SEPA Instant unless any of the following rejections from that scheme occurs
• Upon a soft rejection (examples below), the payment will be retried on SEPA Instant for a maximum period of two and a half hours after which it will be declared rejected. During the retry period the payment will remain in status “Pending Processing”
• Upon a hard rejection (examples below), the payment will be re-routed and processed via SEPA Credit Transfer under applicability criteria of that scheme.

If the payment instruction is not eligible for SEPA Instant
• The payment will be re-routed to the SEPA Credit Transfer scheme at the same cost.
• If the payment cannot be processed under SEPA Credit Transfer either, it will be transparently rejected back to client.

Example root causes (incomplete) triggering retries, re-routings, and rejections

Soft rejections (retries)
• Agent timeout
• Offline creditor

Hard rejections (re-routings)
• Regulatory veto
• Forbidden transaction
• Unidentified error

Hard rejection (terminal rejection back to client)
• Beneficiary fundamental account issues such as
• Invalid or closed account number
• Closed account number
• Blocked account

Reroute error codes and descriptions

Please note:

• Payments instructed via Client Portal or Correspondent and Agency banking payments or Payments Handled in Sanctions, or FX are not in scope.

• Should you notice the automatic retry/re-route feature not working for you if you are instructing SEPAINST via the singles and bulk API endpoint, please reach out to your account manager.

• Please contact our Client Services for more details.