Understanding Payee and Trade Types
To ensure successful cross-border fund collection and regulatory compliance, it is essential to select the correct payeeType and tradeType. These parameters determine how your Virtual Account (VA) functions and how the transaction is reported to financial regulators.
1. Payee Type (payeeType)
payeeType)The payeeType defines the scope of the account's collection capabilities and its lifecycle.
| Value | Name | Description | Best For |
|---|---|---|---|
global_single | Global Single-use | A temporary account supporting SWIFT/International wires. Typically expires after one successful collection. | High-value, one-off B2B trade settlements. |
global_multi | Global Multi-use | A persistent account supporting multiple international wires from various senders over time. | E-commerce marketplace payouts (e.g., Amazon, eBay) or long-term clients. |
local_single | Local Single-use | An account utilizing local clearing houses (e.g., ACH in the US, SEPA in EU) for a one-time transaction. | Domestic transfers within a specific region to minimize fees. |
[!INFO] Global vs. Local Clearing
Global: Utilizes the SWIFT network. It is accessible worldwide but may involve intermediary bank fees and longer processing times.
Local: Utilizes domestic rails. These transfers are often near-instant and significantly cheaper, but the sender must be located in the same country/region as the account.
2. Trade Type (tradeType)
tradeType)The tradeType categorizes the nature of the funds for Anti-Money Laundering (AML) and foreign exchange reporting.
📦 Goods (goods)
goods)Refers to the import and export of physical commodities.
- Compliance Requirement: Transactions must be backed by physical movement of goods.
- Proof of Trade: You should maintain records such as Customs Declarations, Bills of Lading, or Commercial Invoices.
🛠️ Services (services)
services)Refers to intangible trade or service-based transactions.
- Scope: Includes IT services, software licensing, advertising, consulting, international travel, and education.
- Proof of Trade: Typically requires service contracts, digital invoices, or Statements of Work (SOW).
🌐 Common (common)
common)Used for miscellaneous or general transfers that do not strictly fall under goods or services.
- Note: Use this sparingly. Financial institutions may apply stricter scrutiny to
commontransfers as the underlying business logic is less specific.
FAQ & Best Practices
Compliance Hold If you select
goodsbut cannot provide shipping documentation upon request, or selectservicesfor high-value transactions without a contract, your funds may be placed on a Compliance Hold.Cost Optimization If your buyer is based in the same region as your local VA (e.g., a US buyer paying into a US Local VA), always prioritize
local_singleto avoid SWIFT intermediary bank deductions.
Updated about 3 hours ago