Last reviewed: · Curated by Ohmyfin Organisation editorial.
TARGET2 is the European Central Bank's real-time gross settlement (RTGS) system for euro payments inside the Eurozone. SWIFT is the global messaging network. A typical EUR cross-border payment uses SWIFT for the message and TARGET2 for the final EUR leg.
Details
TARGET2 was replaced in March 2023 by T2/T2S, which uses ISO 20022 pacs messages natively.
SWIFT carries the cross-border MT103 / pacs.008. Once it reaches a Eurozone bank, the EUR leg settles on T2.
For purely intra-Eurozone EUR retail payments, banks usually prefer SEPA over T2 because it is cheaper.
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