MT 202COV Explained: Cover Payment

MT 202COV is a special use of MT 202 for "cover payments" — where the interbank settlement leg behind a customer credit transfer (usually an MT 103 sent directly bank-to-customer's-bank) travels through a separate correspondent chain. Regulators required it after concerns that ordinary MT 202s settling customer payments gave intermediary banks no visibility into who the underlying customer parties actually were — a real gap for sanctions and AML screening.

Key fields

• Sequence A — Bank-to-bank settlement details: Same fields as a normal MT 202 (20, 21, 32A, correspondent chain, 58a) — this is what actually moves the funds.
• Sequence B — Underlying customer credit transfer details: A mandatory second block carrying 50a (Ordering Customer), 59a (Beneficiary Customer), and 70 (Remittance Information) — the same customer identities from the original MT 103, included purely for transparency.

Sequence B doesn't move any money or trigger a credit to anyone's account — its only job is to let every bank in the chain see who the payment is really for and against, so each can run its own sanctions and AML checks even though it never touches the customer-facing MT 103 directly.