Inbound Transaction Processing refers to the receipt, validation, and posting of payment transactions that originate from external entities, such as other banks, clearing systems, or payment networks, and are credited to accounts within the bank.

Inbound payments are processed through the following steps:

• Settlement Instruction
  Settlement Instruction in Inbound Transaction Processing refers to the step where the system identifies and records how and through which channels the incoming payment will be settled.
• Bank Redirection
  Handles the redirection of incoming payments to the appropriate bank or branch based on predefined rules.
• Account Redirection
  Redirects incoming payments to the correct customer account based on predefined rules.
• D to A Conversion
  Refers to the process of converting demand (D) deposits or transactions into account (A) credits during the receipt of inbound funds. This ensures proper allocation and posting of the incoming funds to the appropriate account type within the system.
• Account Derivation
  Determines the correct beneficiary account for incoming transactions, using predefined rules and transaction data.
• Charge Account Defaulting
  Assigns a default account for transaction-related charges during the processing of inbound transactions, ensuring consistent and accurate fee handling according to predefined rules.
• PSD Validation
  Ensures that incoming transactions comply with Payment Services Directive (PSD) regulations.
• Network Cutoff Validation
  Validates inbound transactions against the network’s cutoff time to ensure timely processing.
• Beneficiary Name Validations
  Ensure that the beneficiary’s name on incoming transactions matches account records, helping to prevent errors, enhance compliance, and reduce the risk of fraudulent or misdirected payments.
• Customer Payment Restriction Validation
  Checks incoming transactions against predefined customer payment restrictions, ensuring that only permitted payments are credited and helping to enforce risk and compliance policies.
• EU Payer Validation
  Validates the payer’s account and compliance with EU regulations before processing the payment.
• Sanctions Check
  Identifies and blocks any transaction involving individuals, entities, or countries that are subject to economic or trade restrictions.
• Duplicate Check
  Checks whether a transaction is a duplicate to prevent multiple processing of the same payment.
• Authorization Limit Validations
  Validates the transaction amount against defined authorization limits and routes it to the appropriate authorization queue.
• External Account Check Processing
  Verifies whether an external account is required and properly maintained for the incoming transaction.
• Exchange Rate / FX Processing
  This step applies the appropriate foreign exchange (FX) rates to convert inbound transaction amounts from one currency to another.
• Pricing
  Applies the predefined standard price or fee for processing an inbound transaction.
• Charges Calculation - Charge Bearer - DEBT
  Calculates charges where the debtor (payer) bears the transaction fees.
• Accounting
  Refers to posting credit and debit entries for incoming payment transactions to ensure the bank’s ledgers are updated accurately and remain in compliance with accounting standards.
• MIS and UDF
  Refer to the maintenance of reports and analytics (MIS) and custom transaction fields (UDF) in outbound payment processing.
• FI to FI Payment Status Report (pacs.002) generation
  This step generates pacs.002 messages to provide status updates on financial institution-to-financial institution (FI to FI) payment transactions.
• Transaction Cancellation Processing
  Handles the cancellation of inbound payment transactions and updates the system accordingly.
• Future Date Transaction Processing
  Manages inbound payment transactions scheduled for a future date, ensuring they are processed on the intended day.
• Rule-Based Price
  Refers to the automated assignment of pricing to incoming goods or materials based on predefined business rules.
• Loan Account Processing
  Applies validations and postings when the inbound transaction involves a loan account, ensuring correct credit, repayment, or adjustment as per loan account rules.