A payment purpose code is a standardized value used in some countries or payment systems to classify why money is being transferred. The correct code depends on the transaction and jurisdiction and may affect validation, regulatory reporting, tax handling, or processing.
Quick reference for Payment purpose code
| Check | What it means for the transaction |
|---|---|
| Category | Global B2B payment operations |
| Record to keep | Keep the instruction, party and account identifiers, validation result, timestamps, institution references and reconciliation outcome. |
| Do not infer | Initiation, processing, clearing and settlement are different events. One status should not be used as proof of another. |
Payment purpose code and nearby terms
- Purpose of payment: Purpose of payment describes the commercial or other reason funds are being transferred, such as settlement of a supplier invoice.
- Payment route: A payment route is the specific combination of institutions, systems, currencies, and receiving methods used to move funds from payer to Recipient.
