GLOBAL PAYMENTS KNOWLEDGEISO 20022 / SWIFT / SEPA / MT / MX
PAYMENTSSIGNAL

The interactive academy for the standards, messages, and rails that move money.

GET IN TOUCH
SEPA INSTANT

The beneficiary bank says no: an instant payment rejected in seconds

Trigger: Nordbank answers the instant payment negatively — the beneficiary account turns out to be closed.

Contributor Shubham Mathure

What operations sees first: The customer sees an immediate failure message; operations sees a negative pacs.002 arriving seconds after the outbound pacs.008.

WHERE IS THE MONEY?

Reserved during the attempt and released on the reject; the debtor's balance is untouched.

DID SETTLEMENT HAPPEN?

Never occurred — the reject arrived before settlement became final.

WHO ACTS NEXT?

Nordbank (creditor agent) The debtor verifies the beneficiary's details before retrying; no return processing or recovery work is needed.

PLAY THE EXCEPTION

Trigger: Nordbank cannot apply the payment — for example the account is closed or blocked — and answers negatively in time.

STEP 1 / 9MESSAGE

The debtor initiates an instant payment

Debtor (payer) → Bank Alfa (debtor agent)

The customer pays from an app or channel. From this moment the scheme's clock is running — the whole journey must finish within the scheme's time limit.

Step 1 of 9: The debtor initiates an instant payment

  1. 01Message
    The debtor initiates an instant paymentDebtor (payer) → Bank Alfa (debtor agent)
  2. 02Processing
    Bank Alfa validates in real timeBank Alfa (debtor agent)
  3. 03Posting
    The debtor's funds are reservedBank Alfa (debtor agent)
  4. 04Message
    The transfer goes to the instant CSMBank Alfa (debtor agent) → Instant CSM (e.g. TIPS-style) · pacs.008
  5. 05Message
    Nordbank receives the transfer immediatelyInstant CSM (e.g. TIPS-style) → Nordbank (creditor agent) · pacs.008
  6. 06Processing
    Nordbank decides — nowNordbank (creditor agent)
  7. 07 · EXCEPTION PATHMessage
    Nordbank answers negativelyNordbank (creditor agent) → Instant CSM (e.g. TIPS-style) · pacs.002
  8. 08 · EXCEPTION PATHMessage
    The rejection reaches Bank AlfaInstant CSM (e.g. TIPS-style) → Bank Alfa (debtor agent) · pacs.002
  9. 09 · EXCEPTION PATHPosting
    The reservation is released and the debtor informedBank Alfa (debtor agent)
  10. OUTCOME
    Funds
    Never left the debtor's account.
    Settlement
    No settlement — the rejection preceded it.
    Who acts next
    Nordbank (creditor agent) — The debtor checks the beneficiary details; the reason code says what was wrong.
Full step-by-step text (works without JavaScript)
  1. 01Message
    The debtor initiates an instant paymentDebtor (payer) → Bank Alfa (debtor agent)

    The customer pays from an app or channel. From this moment the scheme's clock is running — the whole journey must finish within the scheme's time limit.

  2. 02Processing
    Bank Alfa validates in real timeBank Alfa (debtor agent)

    Format checks, balance check, and sanctions screening all happen in seconds. Anything slow here burns the scheme's time budget.

    Screening checkpoint: Real-time transaction screening — Instant rails force screening to be fast and highly automated — there is no batch window to hide latency in.

  3. 03Posting
    The debtor's funds are reservedBank Alfa (debtor agent)

    Bank Alfa earmarks the amount. The final debit is confirmed only when the beneficiary bank accepts — instant payments are all-or-nothing.

    • RESERVE Debtor's current account at Bank Alfa — EUR 480.00
  4. 04Message
    The transfer goes to the instant CSMBank Alfa (debtor agent) → Instant CSM (e.g. TIPS-style) · pacs.008

    A pacs.008 flagged for the instant scheme is sent to the CSM, which immediately pushes it onward.

  5. 05Message
    Nordbank receives the transfer immediatelyInstant CSM (e.g. TIPS-style) → Nordbank (creditor agent) · pacs.008

    The CSM forwards the payment in real time and waits for the beneficiary bank's answer.

  6. 06Processing
    Nordbank decides — nowNordbank (creditor agent)

    The creditor agent validates the account and screens the payment, then must answer positively or negatively within the scheme's window.

  7. 07 · EXCEPTION PATHMessage
    Nordbank answers negativelyNordbank (creditor agent) → Instant CSM (e.g. TIPS-style) · pacs.002

    The negative pacs.002 carries a reason code. Because it arrives before settlement, nothing has to be unwound.

  8. 08 · EXCEPTION PATHMessage
    The rejection reaches Bank AlfaInstant CSM (e.g. TIPS-style) → Bank Alfa (debtor agent) · pacs.002

    The CSM relays the answer within the same real-time window.

  9. 09 · EXCEPTION PATHPosting
    The reservation is released and the debtor informedBank Alfa (debtor agent)

    The customer sees the failure with its reason within seconds of paying.

    • RELEASE Debtor's current account at Bank Alfa — EUR 480.00
  10. OUTCOME
    Funds
    Never left the debtor's account.
    Settlement
    No settlement — the rejection preceded it.
    Who acts next
    Nordbank (creditor agent) — The debtor checks the beneficiary details; the reason code says what was wrong.

THE TIMELINE

  1. 01Bank Alfa
    Reserves funds on the debtor's account and sends the instant transfer into the CSM.pacs.008
  2. 02Instant CSM
    Delivers the transfer to Nordbank for an accept-or-reject decision within the time limit.pacs.008
  3. 03Nordbank
    Checks the account before accepting and finds it closed.

    In an instant scheme this check happens before settlement, not after — so the same problem that causes a settled return in classic SCT causes a pre-settlement reject here.

  4. 04Nordbank
    Answers negatively; the status report carries reason code AC04 (closed account) back through the CSM to Bank Alfa.pacs.002
  5. 05Bank Alfa
    Releases the reservation and tells the customer straight away, with the reason available.

Resolution: The payment fails before any money moves, so there is nothing to send back. Compare this with the classic SCT closed-account case, where the same AC04 arrives after settlement and needs a settled return.

MESSAGES INVOLVED

LEARN THE CONCEPTS

Sources for this scenario2
  1. Scheme-specific rule2025 version 1.1 (EPC004-16)

    2025 SEPA Instant Credit Transfer rulebook ↗ — European Payments Council · reject provisions

    Governs the SCT Inst scheme: execution time targets, timeout handling, round-the-clock availability, and r-transaction rules for instant euro credit transfers. · Effective 2025-10-05 · Checked 2026-07-12

    Version 1.1 replaced version 1.0 at publication on 5 October 2025 and is stated to remain in effect up to 21 November 2027. The EPC states it is compliant with Regulation (EU) 2024/886, the Instant Payments Regulation.

  2. Simplified educational illustration

    Payments Signal editorial teaching models — Payments Signal

    This site's own simplified teaching models. · Checked 2026-07-12

    What this simplifies: Single-CSM model; institution-specific handling varies.

    Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.