Purpose code

A standardised code, and in some markets a supporting document, stating why a payment is being made. Many central banks require one for inbound or outbound foreign-currency payments as part of exchange control and reporting.

A missing or wrong purpose code is a common cause of a payment being held, returned, or delayed in compliance review at the receiving end. The requirement is set by the destination market rather than by the sending bank, which is why a payment that clears easily into one country stalls in another.