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International ACH / IAT Transactions

IAT – International ACH Transactions Explained

Configuration and Execution with examples.


 What is IAT?

As per the Federal Reserve and NACHA, IAT is a new standard class entry (SEC) code that will replace CBR and PBR SEC Codes that are currently in use today. NACHA rules will require that IAT code and format of all ACH Payments entering or exiting the USA.

Why is IAT necessary?

IAT was developed to respond to OFAC’s request to align the NACHA Rules  with OFAC compliance obligations and to make it easier for RDFIs to  comply with those obligations. In the current environment, many U.S.  financial institutions are receiving international payments that cannot  be properly identified. These unidentifiable payments enter the U.S.  through correspondent banking relationships and are often difficult to  trace or accurately process as international payments. The new IAT code  supports the end of anonymity and promotes traceability of international  electronic payments.



Inbound IAT Process Flow:


IAT Outbound Process Flow:



Q: What information should we expect to  include in the mandatory addenda records for IAT?                

A: The new format will accommodate  the following data elements:


  • Originator’s name/address
  • Beneficiary’s name/address
  • Originating bank name/ID/branch code
  • Foreign correspondent bank name/ID/branch code
  • Receiving bank name/ID/branch code
  • Reason for payment

IAT File Header Record:

The File Header Record introduces the file. It describes the file characteristics and identifies the sender of the file (ODFI – aka Gateway Operator) and who the file is being delivered to (ACH Operator). The record also includes the time, date, and file ID fields that are used to identify a specific file.

IAT Header Record

IAT Example Output:

IAT Example


IAT Company Batch Header Record for IAT Entries Example:

Company Batch Heafer

ach iat example 2

In light of these new developments SAP has responded with OSS Notes:

1343600 and 631281


Details of these notes (specifically 1343600) include the new ACH format suppliment for International ACH Transactions (IAT) that went into effect Sept. 18th 2009


Solutions include:

Using the payment medium workbench to facilitate in the creation of the new ACH / IAT Format. New data elements will have to be created such as “FPM_ACH_IAT_FBCORR_BANK (Foreign Correspondent Bank Name)”, and “FPM_AACH_IAT_FR_XCHNG_IND (Foreign Exchange Indicator)”.


Additional IAT configuration must be done as well including the following:

Payment Medium Format – New Entries “SAP ACH IAT Specific format ACH / IAT Version 4000”

New Instruction keys will have to be defined as well within configuration such as the following:

“Instruction – 10 Code ANN Annuity”

“Instruction – 11 Code ARC Accounts Receivable Entry”

“Instruction – 15 Code LOA Loan”


After Data Structures have been created you will need to create the new format:

SPRO–>Financial Accounting–>Acct Rec. Acct Pay–>Business Transactions–>Outgoing Payments–>Pament Media–>Make Settings for Payment Medium Formats from Payment Medium Workbench–>Adjust Note to Payee.


Note to Payee


– Make sure to add the following: “ACH /IAT Version 4000” also if this will be used for payroll purposes also add the following: “FI_PAYMEDIUM_ACH_DETAILS”

Note to Payee HR

 The instruction keys are used while creating FI invoices with only one being alloted at a time.



– It’s suggested as in our testing that a new Payment method be created in order to facilitate this new format (keep things clean in your system)


Jay Esparza


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      Author's profile photo Former Member
      Former Member
      Hi Jay

      Thanks for sharing details about IAT ACH.  Please let me know if you have successfully implemented IAT.

      I am currently implementing SAP note 1343600 and noticed that there are gaps. This note is not clear about the creation of addenda records. There is no function module assigned for this as a default. I am working with SAP and they suggested use of custom function modules for Event 06 with could be modified from one of the FI_PAYMEDIUM_SAMPLE_***.  Could you please share your experience how you managed this?


      Author's profile photo Former Member
      Former Member

      Please see below for your answer:

      Note 1343600 was about creating all the new data structures, elements and required modifications from the source corrections specified in the note based on the SAP version installed.

      I created all the data structures and elements mentioned in the note and at the end of the note the note talks about the Source code corrections  : I applied the correction 1187455 as we are using ECC 6.0, these contain the code to add the addenda and all other records pertaining to IAT.

      1187455 600 604 SAP_APPL C EB5K019246 02/03/2010

      1187456 46C 500 SAP_APPL C EB5K019246 01/19/2010

      The Function modules mentioned in these notes  are   
      Object Name      Program ID      Object Type      Object Name
      LIMU      FUNC      FI_PAYMEDIUM_ACH_20
      R3TR      FUGR      FPAYM_US
      LIMU      FUNC      FI_PAYMEDIUM_ACH_30
      R3TR      FUGR      FPAYM_US
      LIMU      REPS      LFPAYM_USF01
      R3TR      FUGR      FPAYM_US
      LIMU      REPS      LFPAYM_USTOP
      - Aruna Pitla

      Author's profile photo Former Member
      Former Member
      Hi Experts,
      We are in the process of implementing new IAT ACH format. I have the corresponding notes as well.I have one question here, how the system recongnises the IAT format while making payments. Is there any master data maintenance required on the vendor master

      Thanks & Regards,

      Author's profile photo Former Member
      Former Member
      Blog Post Author
      Hello Radha -
      You will need to assign the new payment method you create for IAT to the vendor master record. This is what we did to avoid any confusion.
      Author's profile photo Former Member
      Former Member
      Blog Post Author
      Also the system knows when to use IAT format based on the payment methods and variants you specify on your payment proposal and run in F110.

      - Jay

      Author's profile photo Former Member
      Former Member
      Hi Jay,
      Thanks for you quick response.In our case, We still want to continue with CTX format and also want to use IAT format side by side. I am still fuzzeled how I will differentiate between these two formats. Is thre any way we can identify the vendors whom we need to use IAT foramt?

      Thanks once again for your valuable inputs

      Author's profile photo Former Member
      Former Member
      Blog Post Author
      You can keep your CTX intact - all you need to do is create a new payment method for IAT - for example if you have CTX setup on payment method "A" then you would simply create a payment method of "I" for IAT transactions and assign the new format to it. This way you have both options available to you. As far as vendor master data goes - you simple just need to specify within that vendor what payment methods they use. So if you want a specific vendor setup as IAT - you just need to make sure that is specified in their record with your new payment method you created as in the example above as "I" for IAT.  If you have any more questions feel free to post on here and I will get back to you as soon as I am able to.

      - Jay Esparza

      Author's profile photo Former Member
      Former Member
      HI Jay,
      Thank you so much for all your time. I am good with your answers as of now. Will reach out in future If need any clarifcation

      Thanks and Regards,

      Author's profile photo Former Member
      Former Member
      Hi Jay,
      I have implemented SAP note 1343600 and as suggested created a new payment method. However when I am testing the new format, I am not finding any 7 records in the file. Is there anything thta I am missing?

      Thanks in Advance