What is the difference between MT799 and MT760?
SWIFT MT799 versus MT760
MT799 is a message that is sent between banks; with the aim of showing funds or proof of deposits. It is important to note that it is not used as a method of transferring funds or an undertaking to do the same. MT760 is a message used for issuing or requesting a Letter of Credit or Documentary Credit. Both are a type of inter-bank message that are used on the SWIFT system so that financial institutions can correspond.
What is difference between MT799 Swift and MT760 Swift?
Some mistake the MT 760 swift and the MT 799 swift. They are sent in the same way, but there are a number of differences. These letters are frequently cited when dealing with Bank Guarantees or types of Documentary Credits. The MT 799 swift is the message format used for correspondence sent in relation to Bank Guarantees. The MT 799 acts as a straightforward confirmation, which sets out that funds are present to cover a specific transaction. The reasoning behind the format and method of the proof of funds, is so that it conforms to the message type used in the SWIFT Category 7 “Treasury Markets & Syndication”. It is perceived as a verification tool and acts only as a bank-to-bank SWIFT electronic verification.
These types of message are sometimes referred to as “free format messages”. One of the main differences between the types of messages is the exchange of a BKE authenticator used in a MT 799; so a test key is coded into the messages sent and received.
An MT 799 is very similar, but there is no test code and so the message is unauthenticated; so having less value unless the message is confirmed. Sometimes the chosen form of communication is the SWIFT MT 760 message, when the SWIFT MT 799 could be a satisfactory bank confirmation. It is important to note that this message type will be sent prior to the signing of agreements and issuance of instruments. However, it is also important to note that for a SWIFT MT 799 to be sent, many financial institutions will have a minimum size of account or transaction required.
The process of an MT 799 is that it is usually received by the funder of the seller; then that recipient institution will normally send a proof of product to the buyer’s financial institution. The trade will then progress.
Payment is then usually made through a wire payment (MT 103) or documentary Letter of Credit.
Are these communications used widely?
It is estimated that the swift system has over eight thousand financial institutions, where they send and receive financial statements. The MT 799 and MT 760 swift are the most widely used. They are usually used just for corresponding between banks and on larger transactions. An MT 799 is a notification tool and is also usually transmitted before an MT 760. It is only when the MT 760 is sent that the bank ring-fences specific funds for a transaction.