Banktobank

Banktobank describes the set of processes by which financial institutions settle payments and obligations with each other. It encompasses large-value transfers between banks, correspondent banking activity, interbank lending clearings, and the settlement of customer payments that rely on interbank rails. The term is not a formal payment-system name but a general descriptor of interbank settlement flows.

It typically involves a payment instruction sent from payer bank to recipient bank via an interbank messaging network (for example SWIFT, ISO 20022-based feeds) and the actual transfer of funds through a settlement mechanism. Depending on the system, settlements can be gross (each payment final when settled, often via real-time gross settlement RTGS) or net (aggregate positions at the end of a cycle). Banks use nostro/vostro accounts to settle obligations, and settlements may occur in central banks or private clearinghouse or large-value payment systems.

Interbank payments are managed under regulatory oversight, AML/KYC, sanctions screening, and settlement risk management. The central bank often provides the rails and finality, helping reduce credit risk and ensure irrevocability of settled payments. Standards such as ISO 20022 promote interoperability and richer data in interbank messages.

Major examples include Fedwire Funds Service and TARGET2 for real-time gross settlement in respective currencies; CHIPS and CHAPS as large-value interbank systems; and international messaging via SWIFT.

Because banktobank is broad and changes with technology, the term is used more by practitioners in a descriptive sense than as a formal product name.