Payment Order Debits vs Credits
A summary of how Payment Order directions are determined in Modern Treasury.
Payment Orders vs. Transactions
| Payment Order Direction | Payment Order Action | Transaction |
|---|---|---|
| Debit | Charge a counterparty (pull funds) | Increase in your account balance |
| Credit | Pay a counterparty (push funds) | Decrease in your account balance |
Payment Orders: Debits and Credits
The direction attribute (credit or debit) of a Payment Order refers to the direction of activity in the External Account (i.e. the Counterparty bank account).
A credit Payment Order will appear as a credit to the External Account. Similarly, a debit Payment Order will appear as debit to the External Account.
Transactions: Debits and Credits
The direction attribute (credit or debit) of a Transaction refers to the direction of money movement in your Internal Account.
This relationship means that a credit Payment Order (push funds) will result in a debit transaction (decrease balance) in the Internal Account. Conversely, a debit Payment Order (pull funds) will result in a credit transaction (increase balance) in the Internal Account.
Updated 9 months ago