SWIFT MT400 Explained: The Advice of Payment for Exporters

You receive a SWIFT MT400 from your bank and assume the money has arrived. You check your account. Nothing shows up. This gap often creates confusion for exporters.

An MT400 is a SWIFT Advice of Payment, not the payment itself. Banks use it mainly in documentary collections to inform the exporter’s bank that the buyer has paid the collecting bank. The message confirms intent and status, not final settlement.

The actual credit to your account depends on the next steps—interbank settlement, deductions, and timelines at the remitting bank’s end.

This article breaks down what an MT400 really means, how the payment flow works after the message arrives, and where charges or delays can quietly appear.

What Is the MT400 SWIFT Message?

The MT400 is a Category 4 message issued on the SWIFT network for Advice of Payment. Its role is straightforward. In practice, the Collecting Bank sends the MT400 to the Remitting Bank once it collects payment from the importer. The message helps banks reconcile the payment with the original collection instruction. 

You will mostly encounter the MT400 in Documentary Collections, especially Cash Against Documents (CAD) and Documents against Payment (D/P) transactions, where control of documents matters as much as the payment itself.

When Is an MT400 Generated?

An MT400 is triggered immediately after the foreign buyer pays the Collecting Bank.

The flow works like this:

• Buyer pays the Collecting Bank (importer’s bank).
• Collecting Bank sends MT400.
• Message travels to the Remitting Bank (exporter’s bank).

This confirms that the collection instruction under URC 522 has been completed.

Does the MT400 Carry the Funds?

No. The MT400 usually does not move money. It only advises that funds have been received at the buyer’s bank. In rare cases, where two banks maintain direct settlement accounts, payment may settle alongside the message. In most cross-border trades, however, liquidity moves separately through messages like MT202 or MT103.

Explore Razorpay’s Global Payment Solutions

The MT400 Workflow in International Trade

An MT400 does not move money by itself. It sits inside a wider documentary collection process where documents move physically, while payment information moves digitally over SWIFT. Understanding this sequence helps you know exactly why you are waiting—and who is holding the funds at each stage.

Step 1: Collection and Document Presentation

The process starts with documents, not money. You ship the goods and submit the required documents—invoice, bill of lading, packing list—to your bank. The collecting bank then presents these documents to the buyer.

This usually happens under:

• Documents against Payment, or
• Cash Against Documents terms

The buyer can access the documents only after agreeing to pay.

Step 2: Buyer Payment and MT400 Creation

Once the buyer pays, the collecting bank receives the funds into its account. At this stage, it:

• Applies agreed bank charges
• Confirms receipt of payment
• Sends an MT400 Advice of Payment to your remitting bank

The MT400 signals that payment has been made to the collecting bank—but not that you have been paid yet.

Step 3: Settlement via Correspondent Banks

While the MT400 travels as a message, the actual funds move separately through correspondent banks, typically using an MT202.

This settlement leg is critical. The MT400 tells your bank:

• Which correspondent bank will send the funds
• Where to watch for the incoming credit

Only after this settlement completes does your bank credit your account. Until then, you are effectively waiting at the final checkpoint.

MT400 Vs. Other SWIFT Messages: What Is the Difference?

Exporters often receive more than one SWIFT-related update for the same transaction. This happens because trade payments rely on different messages for different jobs. Some messages inform, while others move money.

MT400 Vs. MT103

These two are often mistaken for each other.

• MT400 confirms that the buyer has paid the collecting bank.
• MT103 is the actual payment instruction with beneficiary details.
• MT103 works for general remittances like service exports or advance payments.
• MT400 appears specifically in documentary collections, not regular wire transfers.

MT400 Vs. MT202

• MT202 is a bank-to-bank transfer used to move liquidity.
• The MT400 announces that payment has happened.
• The MT202 quietly settles the money between banks.

Exporters rarely see the MT202, but your bank relies on it to credit your account. Think of the MT400 as the alert—and the MT202 as the engine doing the real work.

Comparison of Common SWIFT Messages

Decoding the MT400 Format: Key Fields for Businesses

The MT400 looks technical at first glance, but you do not need to understand the entire SWIFT structure. For exporters, only a few fields in Block 4 (Text Block) actually matter. These fields tell you how much was paid, what was deducted, and where the money is moving. Reading them correctly helps you reconcile invoices and spot short payments early.

Below is a business-friendly way to read the most important MT400 SWIFT message fields, without getting lost in banking jargon.

Tracking the Transaction: Fields 20 and 21

These two fields help you match the MT400 to the right export order.

• Field 20 (Sender’s Reference): This is the collecting bank’s internal reference for the transaction.
• Field 21 (Related Reference): This links the MT400 to your bank’s original documentary collection number.

Always match Field 21 with your collection advice. If this reference is wrong or missing, reconciliation delays are common.

The Money Trail: Fields 32A and 33A

This is where exporters usually spot differences.

• Field 32A (Amount Collected): The gross amount paid by the buyer.
• Field 33A (Proceeds Remitted): The net amount sent onwards to your bank.

In simple terms:

Field 33A = Field 32A – deductions

If your credited amount looks lower, these two fields explain why.

Understanding Deductions: Field 71B

• Field 71B (Details of Charges): This shows what the collecting bank deducted before remittance.

Common codes include:

• COMM – Bank commission
• POST – Courier or postage
• TELE – SWIFT or transmission fees

This field is critical when resolving short receipts. Without checking field 71B charges, exporters often chase buyers unnecessarily.

The Settlement Route: Fields 53, 54, and 57

These fields explain how the money moves between banks, not just that payment has been made.

• Field 53 (Sender’s Correspondent): The bank from which the collecting bank releases the funds.
• Field 54 (Receiver’s Correspondent): The bank that receives the funds on behalf of your remitting bank.
• Field 57 (Account With Institution): Your bank, where the funds should finally be credited.

Each additional correspondent means another settlement step. Multiple hops here often explain why funds arrive days after the MT400.

Streamlining Cross-Border Settlements with Razorpay

Delays after an MT400 often come from layered banks, manual follow-ups, and unclear settlement paths—this is where a simpler collection and settlement setup like Razorpay makes a real difference.

Here is how it helps:

• It lets you receive overseas funds directly into India without navigating complex correspondent banking chains.
• You get clear visibility on gross amount, fees, and net credit, making reconciliation easier when matching invoices and bank credits.
• Provides faster settlement timelines compared to traditional documentary collections, reducing the wait between payment advice and actual funds.
• Offers built-in support for FIRC and compliance documentation, so you are not chasing banks after the money arrives.
• Well-suited for SaaS exporters, freelancers, and service providers where MT400-style collections often feel overly complex for the transaction size.

Conclusion

The MT400 plays a vital role in international documentary collections by acting as a reliable Advice of Payment. It helps you reconcile incoming collections, understand when the buyer has paid, and identify likely deductions through Field 71B as well as the settlement path via Fields 53 and 54.

At the same time, it is important to treat the MT400 for what it is—a confirmation of buyer payment to the collecting bank, not the final credit to your account. When you read the message carefully and use its details proactively, you can follow up faster with banks, reduce uncertainty in collections, and bring greater discipline to your accounts receivable process.

FAQs

Q1: How does an MT400 differ from an MT103 message?

An MT400 is an Advice of Payment used specifically in documentary collections. An MT103, on the other hand, is a customer credit transfer that actually moves money in a general international wire transfer.

Q2: What is the relationship between MT400 and MT202 messages?

The MT400 informs the remitting bank that the collection is complete. The MT202 works in the background as a bank-to-bank cover payment, moving the actual liquidity needed to settle the transaction.

Q3: Is it mandatory to receive an MT400 for every export transaction?

No, it’s not mandatory for every export transaction. MT400 messages apply only to documentary collections such as D/P or CAD. 

Q4: What do Field 53 and Field 54 tell me in an MT400?

Field 53 shows the sender’s correspondent bank, while Field 54 shows the receiver’s correspondent bank. Together, they map the chain of intermediary banks through which the funds will pass before reaching you.