25 years: Payments & banking
Following Pat's introductory video on international payments, Pat now dives into further detail with some examples of international payments.
Following Pat's introductory video on international payments, Pat now dives into further detail with some examples of international payments.
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18 mins
All international payments are made up of two components: the payments instruction, and the money. Accepting this tenet will assist in understanding all kinds of payments from the simple to complex cross border payments much better.
Key learning objectives:
Explain the processes in each of the examples outlined below
Recognise the various SWIFT formats.
Learn the advantages of serial payments over direct and cover payments
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Information: Bank A has an account with Bank B. Bank A is located in London and Bank B is located in Bangkok. Bank A’s account will be denominated in the local home currency for Bank B - Thai Baht.
Example 2: Where the currency involved is not local to either Bank.
Information: Bank A is making a payment to Bank B, but the payment is denominated in US Dollars.
Example 3: Let’s look at Example 2 again, but this time let’s effect the payment via the serial method
Information: Bank A asks Bank C to make the payment to Thailand. The instruction also includes permission to Bank C to debit the amount of the payment to Bank A’s account so that Bank C has the funds available to make the payment.
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