Every cross-border wire instruction asks for a purpose: "consulting fees", "family gift", "invoice 12345". The question is not bureaucratic theatre — it is a structured input to AML monitoring and tax reporting.
The bank uses the purpose to: (a) screen against unusual patterns for your account, (b) categorise for regulatory reporting, (c) populate field 70 of the MT103, (d) supply local tax authorities where required.
A vague "personal" or "transfer" trips automatic compliance flags at many banks. A specific purpose — "December consulting invoice", "family birthday gift" — passes through with less friction.
For corporate clients, structured purpose codes are increasingly required: ISO 20022 has a 4-letter purpose code list (SALA = salary, INTC = intra-company, IVPT = invoice payment, etc.). Some banks accept these directly.
For high-risk corridors (cash-economy destinations, some emerging markets), banks may require supporting documentation: contract, invoice, ID of beneficiary. Cooperate quickly.
For tax purposes: many countries require banks to report cross-border flows by purpose (FATCA, CRS, FBAR). Honest categorisation here protects you from later audit questions.
Practical tip: write the same purpose for repeating payments to the same beneficiary. The bank's AML system learns the pattern and stops flagging.
You must be truthful — false purpose is regulatory fraud. But specific truthful purpose is faster than vague truthful purpose.
Yes — field 70 travels end-to-end and appears on the beneficiary statement. Keep it professional.
Field equivalent exists in SCT. Domestic SEPA payments inside one country may be more permissive than cross-border.
For larger amounts or high-risk corridors, enhanced due diligence is mandatory. Provide invoice / contract; the payment will release.