MT 400 Explained: Advice of Payment (Collections)

MT 400 is the collecting bank telling the remitting bank that the drawee (the importer, under a documentary or clean collection) has paid. Unlike a Letter of Credit, a collection carries no bank payment undertaking — the exporter is relying on the importer's willingness to pay, so this advice is the first confirmation that payment has actually happened.

Key fields

• 20 — Sender's Reference: Reference for this advice.
• 21 — Related Reference: Ties back to the original collection instruction this payment relates to.
• 32a — Amount Collected: How much was actually paid.
• 33a — Original/Collected Amount: Shown separately if charges or deductions mean the collected amount differs from what was originally instructed.
• 57a — Account With Institution: Where the collected proceeds are being routed or held.

Collections are inherently slower and less certain than LC-based trade, which is exactly why the exporter's bank waits for this specific advice rather than assuming payment has occurred once documents are sent.