Payments Academy
Batch salary file overview 1 NOW Batch salary file overview 2 File validation and screening 3 STEP2 clearing and T2 settlement 4 Failure at each minute 5 Batch risks 6 Timeline test A batch payment is a file of many payments processed together, and the timeline below is for a real salary file of 500 payments totalling EUR 1. Step 1 of 6 Batch salary file overview 1 NOW Batch salary file overview 2 File validation and screening 3 STEP2 clearing and T2 settlement 4 Failure at each minute 5 Batch risks 6 Timeline test A batch payment is a file of many payments processed together, and the timeline below is for a real salary file of 500 payments totalling EUR 1. Step 1 of 6
File validation and screening 1 Batch salary file overview 2 NOW File validation and screening 3 STEP2 clearing and T2 settlement 4 Failure at each minute 5 Batch risks 6 Timeline test At 09:00 Bank A debits the corporate account for EUR 1 Step 2 of 6 File validation and screening 1 Batch salary file overview 2 NOW File validation and screening 3 STEP2 clearing and T2 settlement 4 Failure at each minute 5 Batch risks 6 Timeline test At 09:00 Bank A debits the corporate account for EUR 1 Step 2 of 6
STEP2 clearing and T2 settlement 1 Batch salary file overview 2 File validation and screening 3 NOW STEP2 clearing and T2 settlement 4 Failure at each minute 5 Batch risks 6 Timeline test 008 messages and reports. Step 3 of 6 STEP2 clearing and T2 settlement 1 Batch salary file overview 2 File validation and screening 3 NOW STEP2 clearing and T2 settlement 4 Failure at each minute 5 Batch risks 6 Timeline test 008 messages and reports. Step 3 of 6
Failure at each minute 1 Batch salary file overview 2 File validation and screening 3 STEP2 clearing and T2 settlement 4 NOW Failure at each minute 5 Batch risks 6 Timeline test At 14:00, if Bank A cannot fund the net settlement, the cycle is at risk, and treasury must fund it from reserves or intraday credit, or the system will apply its default procedure. Step 4 of 6 Failure at each minute 1 Batch salary file overview 2 File validation and screening 3 STEP2 clearing and T2 settlement 4 NOW Failure at each minute 5 Batch risks 6 Timeline test At 14:00, if Bank A cannot fund the net settlement, the cycle is at risk, and treasury must fund it from reserves or intraday credit, or the system will apply its default procedure. Step 4 of 6
Batch risks for bank and corporate 1 Batch salary file overview 2 File validation and screening 3 STEP2 clearing and T2 settlement 4 Failure at each minute 5 NOW Batch risks 6 Timeline test Ask what happens when the file does not balance, when a payment is rejected, when a payment is held, when the clearing file is rejected, and when the settlement cannot be funded. Step 5 of 6 Batch risks for bank and corporate 1 Batch salary file overview 2 File validation and screening 3 STEP2 clearing and T2 settlement 4 Failure at each minute 5 NOW Batch risks 6 Timeline test Ask what happens when the file does not balance, when a payment is rejected, when a payment is held, when the clearing file is rejected, and when the settlement cannot be funded. Step 5 of 6
Timeline test for a batch product 1 Batch salary file overview 2 File validation and screening 3 STEP2 clearing and T2 settlement 4 Failure at each minute 5 Batch risks 6 NOW Timeline test Takeaway: a batch salary file of 500 payments totalling EUR 1.2 million moves from pain.001 upload at 08:00 to beneficiary credit at 15:00 Step 6 of 6 Timeline test for a batch product 1 Batch salary file overview 2 File validation and screening 3 STEP2 clearing and T2 settlement 4 Failure at each minute 5 Batch risks 6 NOW Timeline test Takeaway: a batch salary file of 500 payments totalling EUR 1.2 million moves from pain.001 upload at 08:00 to beneficiary credit at 15:00 Step 6 of 6

Flow of the explanation in this lesson.

0:00 / 9:43 Step 1 of 6

Minute-by-minute timeline for one batch payment

Lifecycle timelines and failure modes, Lesson 2 of 5, Narration 9:43, D03 Payment lifecycle

Execution dateReconciliationSettlement

What you will learn

Your objective. By the end of this lesson, you will be able to explain minute-by-minute timeline for one batch payment and apply it to a real banking scenario.

Why it matters. Takeaway: a batch salary file of 500 payments totalling EUR 1.2 million moves from pain.001 upload at 08:00 to beneficiary credit at 15:00, through validation, screening, debit, pacs.008 creation, STEP2 clearing and T2 settlement, with 3 IBAN rejections and 2 held payments reported separately.

Chapter objective: Minute-by-minute timelines for one instant, one batch and one cross-border payment

Key learning points

  • Batch salary file overview
  • File validation and screening
  • STEP2 clearing and T2 settlement
  • Failure at each minute
  • Batch risks for bank and corporate
  • Timeline test for a batch product

Key terms

Execution date: The date on which the bank executes a payment instruction, debiting the debtor account and sending the message onward.

Reconciliation: The process of comparing records from two sources, such as a bank statement and an internal ledger, to confirm they agree.

Settlement: The final movement of funds between banks to discharge obligations created by cleared payments. Settlement is usually made in central bank money or through correspondent accounts.

ISO 20022 XML explorer showing Minute-by-minute timeline for one batch payment.

Practise this lesson

Exercise

A corporate uploads a salary file of 500 payments totalling EUR 1.2 million at 08:00. Trace it to beneficiary credit, including the 3 IBAN rejections and the 2 held payments.

Use the timeline: pain.001 file, validation, pain.002, screening, debit, pacs.008 file to STEP2, clearing, T2 settlement, beneficiary credit.

  1. What to do. State the time, the message and the posting at each step, and how the corporate is told about the failed payments.

Correct result. 08:00 pain.001 uploaded; 08:05 file validated; 08:15 three payments rejected for invalid IBAN, reported in pain.002 with reason BE01; 08:30 two payments held for sanctions review; 09:00 corporate debited EUR 1,188,000 for the 495 payments to be sent; 09:30 pacs.008 file to STEP2; 12:00 clearing nets Bank A to EUR 400,000 owed; 14:00 T2 settles; 15:00 beneficiaries credited; 16:00 status report lists 495 successful, 3 rejected and 2 held payments.

Why. A file error rejects the whole file, while a payment error rejects only that payment.

Check your understanding

Practice question

In a batch salary file, what happens to a payment with an invalid IBAN?

Takeaway and next step

What to remember

Takeaway: a batch salary file of 500 payments totalling EUR 1.2 million moves from pain.001 upload at 08:00 to beneficiary credit at 15:00, through validation, screening, debit, pacs.008 creation, STEP2 clearing and T2 settlement, with 3 IBAN rejections and 2 held payments reported separately.

Follow EUR 1 through every stage, from instruction to beneficiary credit, and note where it can stop.

Open the Payment Lifecycle Simulator →

Builds on "Minute-by-minute timeline for one instant payment".

Transcript and full text

Show transcript

A batch payment is a file of many payments processed together, and the timeline below is for a real salary file of 500 payments totalling EUR 1. 2 million, sent by a corporate customer of Bank A in Paris through a pain.001 file, for value on Monday 9 November 2026, through the SEPA Credit Transfer scheme and STEP2. The messages are a pain.001 file, a pain.002 status report, pacs.008 messages to the clearing system, and a camt.053 statement at the end of the day. Source: European Payments Council, SEPA Credit Transfer Rulebook 2025, version 1. 1, effective 5 October 2025; ISO 20022, pain.001, pain.002 and pacs.008. At 08:00 the corporate customer uploads a pain.001 file with 500 credit transfers totalling EUR 1. 2 million, with a requested execution date of Monday 9 November 2026, and a file identifier SAL-2026-11-09. At 08:15 Bank A runs the payment level validation, checks each IBAN, each amount and each remittance reference, and finds 3 payments with an invalid IBAN, which are rejected and reported in a pain.002 with reason code BE01 for an incorrect account number. At 09:00 Bank A debits the corporate account for EUR 1,188,000, which is the total of the 495 payments that will be sent, and credits the settlement account, so the ledger balance falls and the settlement account rises. At 09:30 Bank A creates 495 pacs.008. At 12:00 STEP2 runs the clearing cycle, nets Bank A position against all other participants, and calculates that Bank A owes a net EUR 400,000 to the system, because it also received payments from other banks that day. At 14:00 STEP2 settles the net amounts through T2, so Bank A reserve account falls by EUR 400,000, and the settlement is final in central bank money. At 15:00 the beneficiary banks receive the pacs.008. At 16:00 Bank A receives a pain.002 and pacs.002 reports confirming that 495 payments were credited, and sends a file status report to the corporate customer, listing the 495 successful payments, the 3 IBAN rejections and the 2 held payments. The parties and the systems are the corporate customer, Bank A, the STEP2 clearing system, the central bank through T2, and the 495 beneficiary banks. Bank A validates, screens, debits, creates the pacs.008 messages and reports. STEP2 clears and nets, and T2 settles in central bank money. The timeline is long because a batch payment is processed in cycles, not in real time, and the customer must be told the cut-off, the value date and the reporting time when the file is uploaded, or the customer will expect the money earlier than it can arrive. The SEPA Credit Transfer rulebook requires the beneficiary bank to credit the beneficiary by the end of the business day following receipt, and the value date must be no later than that day. Failure at each minute has a different cause and a different recovery. At 08:05, if the file total does not match the sum of the transactions, the whole file is rejected, and the corporate must correct and resend it, because a file that does not balance cannot be processed. At 08:15, if an IBAN is invalid, only that payment is rejected, and the rest proceed, and the corporate must correct the IBAN and resend that payment separately. At 09:30, if the clearing file is rejected by STEP2, Bank A must correct the file and resend it before the cut-off, or the payments will be value dated the next day. At 14:00, if Bank A cannot fund the net settlement, the cycle is at risk, and treasury must fund it from reserves or intraday credit, or the system will apply its default procedure. The effect on the bank, the customer and operations is that a batch payment is a bulk operation with bulk risks. For the bank, a batch file is a large liquidity outflow that treasury must fund, and the debit of EUR 1,188,000 must be planned before the file is accepted. For operations, the file is a reconciliation item: the file total, the pain.002 total, the pacs.008 total, the clearing total and the settlement total must all agree, and any difference is a break that must be investigated before the next file is accepted. A business analyst must specify the file format, the validation rules, the rejection handling, the cut-off, the value date and the status reporting for every batch product. For a business analyst, product owner or subject matter expert, the test is to draw this timeline for any batch payment and to name the file, the message, the status, the posting and the deadline at each minute. Ask what happens when the file does not balance, when a payment is rejected, when a payment is held, when the clearing file is rejected, and when the settlement cannot be funded. Ask how the corporate is told, how the employees are told, and how the file is reconciled. Ask what the cut-off is, what the value date is, and what the reporting time is. The SEPA Credit Transfer rulebook and the ISO 20022 pain.001 and pain.002 message definitions are the sources for the file and the reporting, and both must be cited in the requirement with version and effective date. Two mistakes are common in batch payment design. The first is to debit the corporate account for the full file total, which overstates the debit and understates the available balance, and the corporate will complain that money was taken for payments that were not sent. The second is to report only a total, without listing which payments succeeded and which failed, which leaves the corporate unable to pay the failed employees, and the employees will complain to the corporate, not to the bank. The correct design is to debit only the payments that will be sent, to report every payment by its status, and to provide a resend mechanism for the failed payments, with a new file identifier and a new value date, so that the resend does not duplicate the original. Takeaway: a batch salary file of 500 payments totalling EUR 1.2 million moves from pain.001 upload at 08:00 to beneficiary credit at 15:00, through validation, screening, debit, pacs.008 creation, STEP2 clearing and T2 settlement, with 3 IBAN rejections and 2 held payments reported separately. Every minute has a file, a message, a posting and a deadline, and a file error rejects the file while a payment error rejects only that payment. Further reading: European Payments Council, SEPA Credit Transfer Rulebook 2025, version 1.1, effective 5 October 2025; ISO 20022, pain.001, pain.002 and pacs.008 message definitions. Last reviewed 7 November 2026.

A batch payment is a file of many payments processed together, and the timeline below is for a real salary file of 500 payments totalling EUR 1. 2 million, sent by a corporate customer of Bank A in Paris through a pain.001 file, for value on Monday 9 November 2026, through the SEPA Credit Transfer scheme and STEP2. The messages are a pain.001 file, a pain.002 status report, pacs.008 messages to the clearing system, and a camt.053 statement at the end of the day. Source: European Payments Council, SEPA Credit Transfer Rulebook 2025, version 1. 1, effective 5 October 2025; ISO 20022, pain.001, pain.002 and pacs.008.

At 08:00 the corporate customer uploads a pain.001 file with 500 credit transfers totalling EUR 1. 2 million, with a requested execution date of Monday 9 November 2026, and a file identifier SAL-2026-11-09. At 08:15 Bank A runs the payment level validation, checks each IBAN, each amount and each remittance reference, and finds 3 payments with an invalid IBAN, which are rejected and reported in a pain.002 with reason code BE01 for an incorrect account number. At 09:00 Bank A debits the corporate account for EUR 1,188,000, which is the total of the 495 payments that will be sent, and credits the settlement account, so the ledger balance falls and the settlement account rises.

At 09:30 Bank A creates 495 pacs.008. At 12:00 STEP2 runs the clearing cycle, nets Bank A position against all other participants, and calculates that Bank A owes a net EUR 400,000 to the system, because it also received payments from other banks that day. At 14:00 STEP2 settles the net amounts through T2, so Bank A reserve account falls by EUR 400,000, and the settlement is final in central bank money. At 15:00 the beneficiary banks receive the pacs.008. At 16:00 Bank A receives a pain.002 and pacs.002 reports confirming that 495 payments were credited, and sends a file status report to the corporate customer, listing the 495 successful payments, the 3 IBAN rejections and the 2 held payments.

The parties and the systems are the corporate customer, Bank A, the STEP2 clearing system, the central bank through T2, and the 495 beneficiary banks. Bank A validates, screens, debits, creates the pacs.008 messages and reports. STEP2 clears and nets, and T2 settles in central bank money. The timeline is long because a batch payment is processed in cycles, not in real time, and the customer must be told the cut-off, the value date and the reporting time when the file is uploaded, or the customer will expect the money earlier than it can arrive. The SEPA Credit Transfer rulebook requires the beneficiary bank to credit the beneficiary by the end of the business day following receipt, and the value date must be no later than that day.

Failure at each minute has a different cause and a different recovery. At 08:05, if the file total does not match the sum of the transactions, the whole file is rejected, and the corporate must correct and resend it, because a file that does not balance cannot be processed. At 08:15, if an IBAN is invalid, only that payment is rejected, and the rest proceed, and the corporate must correct the IBAN and resend that payment separately. At 09:30, if the clearing file is rejected by STEP2, Bank A must correct the file and resend it before the cut-off, or the payments will be value dated the next day. At 14:00, if Bank A cannot fund the net settlement, the cycle is at risk, and treasury must fund it from reserves or intraday credit, or the system will apply its default procedure.

The effect on the bank, the customer and operations is that a batch payment is a bulk operation with bulk risks. For the bank, a batch file is a large liquidity outflow that treasury must fund, and the debit of EUR 1,188,000 must be planned before the file is accepted. For operations, the file is a reconciliation item: the file total, the pain.002 total, the pacs.008 total, the clearing total and the settlement total must all agree, and any difference is a break that must be investigated before the next file is accepted. A business analyst must specify the file format, the validation rules, the rejection handling, the cut-off, the value date and the status reporting for every batch product.

For a business analyst, product owner or subject matter expert, the test is to draw this timeline for any batch payment and to name the file, the message, the status, the posting and the deadline at each minute. Ask what happens when the file does not balance, when a payment is rejected, when a payment is held, when the clearing file is rejected, and when the settlement cannot be funded. Ask how the corporate is told, how the employees are told, and how the file is reconciled. Ask what the cut-off is, what the value date is, and what the reporting time is. The SEPA Credit Transfer rulebook and the ISO 20022 pain.001 and pain.002 message definitions are the sources for the file and the reporting, and both must be cited in the requirement with version and effective date.

Two mistakes are common in batch payment design. The first is to debit the corporate account for the full file total, which overstates the debit and understates the available balance, and the corporate will complain that money was taken for payments that were not sent. The second is to report only a total, without listing which payments succeeded and which failed, which leaves the corporate unable to pay the failed employees, and the employees will complain to the corporate, not to the bank. The correct design is to debit only the payments that will be sent, to report every payment by its status, and to provide a resend mechanism for the failed payments, with a new file identifier and a new value date, so that the resend does not duplicate the original.

Takeaway: a batch salary file of 500 payments totalling EUR 1.2 million moves from pain.001 upload at 08:00 to beneficiary credit at 15:00, through validation, screening, debit, pacs.008 creation, STEP2 clearing and T2 settlement, with 3 IBAN rejections and 2 held payments reported separately. Every minute has a file, a message, a posting and a deadline, and a file error rejects the file while a payment error rejects only that payment. Further reading: European Payments Council, SEPA Credit Transfer Rulebook 2025, version 1.1, effective 5 October 2025; ISO 20022, pain.001, pain.002 and pacs.008 message definitions. Last reviewed 7 November 2026.

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