Electronic Remittance Advice (ERA) in Cross-Border Payments

ERA is a digital message that accompanies a payment, detailing the purpose, breakdown, and deductions. It includes invoice numbers, fees, adjustments, and other essential information in a structured format your systems can process automatically.
In industries where speed and trust determine customer choice, ERA brings clarity to cross-border payments, reducing disputes and enhancing confidence.
This blog explores ERA: what it is, how it works, why it matters, and best practices for implementation.

1. Electronic Remittance Advice (ERA)

What is Electronic Remittance Advice (ERA)?....................................................................1
ERA vs. Paper Remittance Advice.......................................................................................2
What Does an ERA Include?.................................................................................................2
How ERA Works in Transactions..........................................................................................2
ERA in Real-Life Cross-Border Scenarios...........................................................................3
Why ERA Matters for Financial Institutions........................................................................3
Global Standards and Adoption...........................................................................................4
Remittance Advice Codes.....................................................................................................4
Best Practices for ERA Implementation..............................................................................5
Implementing ERA for Your Business..................................................................................5
Challenges to Consider.........................................................................................................5
The Future of ERA..................................................................................................................6
Conclusion..............................................................................................................................6


Handling cross-border remittances isn’t just about moving money—it’s often more
challenging to explain where the money went and why.
Common pain points include:
●​Recipients receiving payments without knowing which invoice or obligation it covers.
●​Family remittances arriving short, with unclear deductions.
●​Compliance teams spend hours manually reconciling transactions without full
context.
●​Customer frustration and regulatory scrutiny due to lack of transparency.
This is where Electronic Remittance Advice (ERA) becomes invaluable. ERA is a digital
message that accompanies a payment, detailing the purpose, breakdown, and deductions. It
includes invoice numbers, fees, adjustments, and other essential information in a structured
format your systems can process automatically.
In industries where speed and trust determine customer choice, ERA brings clarity to
cross-border payments, reducing disputes and enhancing confidence.
This blog explores ERA: what it is, how it works, why it matters, and best practices for
implementation.

What is Electronic Remittance Advice (ERA)?
In simple terms, an Electronic Remittance Advice is a structured digital message that travels
alongside a payment, explaining what the payment is for. It answers key questions:

2. ●​Who sent the money?
●​How much was transferred?
●​Why was the payment made?
●​Were there any fees or adjustments?
ERA links a payment directly to its source record—whether it’s an invoice, loan repayment,
or insurance claim. Unlike generic transaction references, ERA provides a complete and
clear picture of each transfer.

ERA vs. Paper Remittance Advice
Historically, remittance advice was sent on paper via post or fax. These documents often
arrived late, were incomplete, or got lost entirely.
With financial operations moving in real time, paper-based methods create friction and
delays.
Electronic Remittance Advice solves this by delivering the same information instantly in a
structured, digital format that integrates seamlessly with banking, ERP, and compliance
systems.

What Does an ERA Include?
A typical ERA contains:
●​Invoice or claim number
●​Payment amount
●​Sender and recipient details
●​Goods or services covered
●​Taxes, fees, or deductions
●​Exchange rates applied
●​Notes on adjustments or cancellations
This structured data automates reconciliation, reducing errors and manual effort.

How ERA Works in Transactions
ERA links the payment with supporting details required for reconciliation. When a transfer is
processed, the ERA file is generated simultaneously.

3. This can flow via SWIFT networks, ISO 20022 XML formats, or APIs, depending on the
system. On the recipient side, ERA integrates directly into accounting or treasury platforms,
allowing finance teams to see both the payment and the invoice it settles.

ERA in Real-Life Cross-Border Scenarios
1. Business-to-Business Supplier Payments
Example: A German distributor pays $200,000 to a manufacturer in Nigeria. Without ERA,
the Nigerian finance team only sees the credit, forcing manual reconciliation.
With ERA, the payment arrives with invoice numbers, order references, goods supplied, and
deductions, enabling faster reconciliation, fewer errors, and better supplier relations.
2. Family Remittances
Example: A worker in the UAE sends $600 monthly to a family in Egypt. Without ERA, the
family sees only the final amount.
With ERA, they see the sender’s name, purpose, fees, FX rates, and net amount, enhancing
transparency and building trust in formal channels.
3. Healthcare and Insurance Settlements
Example: A Canadian insurer pays a $5,000 hospital claim in Mexico. Without ERA, the
hospital lacks clarity on patient IDs or claim references.
ERA provides full details: patient ID, claim reference, billed and covered amounts,
deductions, allowing fast reconciliation and avoiding disputes.
4. Cross-Border Payroll
Example: A UK logistics company pays salaries in Kenya, Ghana, and Tanzania. Without
ERA, local teams only see net credits.
ERA lists employee IDs, gross salary, taxes withheld, and net pay, enabling transparent
payroll, smoother audits, and greater employee trust.

Why ERA Matters for Financial Institutions
ERA is more than additional data—it improves operations, compliance, and customer trust.
Banks:

4. ●​Automate reconciliation with invoice-linked payments
●​Ensure compliance with clear, traceable transfers
●​Reduce exceptions and errors
Fintechs:
●​Integrate seamlessly with ERPs, wallets, and accounting systems
●​Offer customer transparency on payments and charges
●​Differentiate from competitors by providing trust
Remittance Providers:
●​Enhance customer confidence with transparent deductions and fees
●​Lower support costs from fewer payment queries
●​Meet regulatory requirements efficiently

Global Standards and Adoption
ERA adoption is tied to ISO 20022 messaging standards, which ensure payments carry
structured, readable data.
Regions like Europe and Asia are rapidly adopting ISO 20022. In Africa, mobile money
integration can extend ERA transparency to millions of users.
Early adoption helps financial institutions stay ahead of compliance requirements and meet
rising customer expectations.

Remittance Advice Codes
Remittance advice codes provide standardized explanations for payment statuses, errors, or
adjustments, simplifying reconciliation and reducing confusion.
Common ERA Codes:
Code Meaning
FX01 Foreign exchange rate applied
TX02 Tax or service fee deducted

5. D03 Duplicate payment detected
PND04 Payment pending verification
INV05 Invoice number mismatch
CXL06 Payment canceled for compliance
These codes accelerate issue resolution and automate reconciliation.

Best Practices for ERA Implementation
1.​Automate ERA Processing: Integrate ERA into banking, ERP, or remittance
systems.
2.​Monitor Data Regularly: Use dashboards or reports to track anomalies.
3.​Leverage Standardized Codes: Train teams to act on ERA codes for faster issue
resolution.
4.​Train Staff: Ensure your teams understand and can use ERA effectively.
5.​Adopt Digital Platforms: Partner with platforms like DigiPay.Guru with built-in ERA
support.

Implementing ERA for Your Business
1.​System Integration: Ensure your platform supports ERA or ISO 20022.
2.​Select Vendors: Choose providers specializing in cross-border remittance solutions.
3.​Staff Training: Train finance and compliance teams on ERA workflows.
4.​Pilot and Scale: Start with high-volume multiple corridors, then expand globally.

Challenges to Consider
●​Legacy systems may not support ERA formats
●​Not all corridors have standardized messaging
●​Integration can be costly
●​Regulations differ by region

6. ●​Staff require training to interpret ERA data

The Future of ERA
●​Real-time payments: Instant ERA details for faster reconciliation
●​Global ISO 20022 adoption: ERA becomes standard worldwide
●​Data-rich transactions: More structured fields for automation
●​Wallet integration: Transparency extends beyond banks
●​AI-driven reconciliation: Predict errors, flag risks, and auto-resolve disputes
●​Regulatory enforcement: ERA as proof of transparency in high-risk corridors

Conclusion
In cross-border remittances, clarity builds trust. Without ERA, transactions remain opaque,
causing disputes and customer frustration. With ERA, every payment is transparent,
reconciliable, and compliant.
For banks, fintechs, and remittance providers, ERA enhances operations, strengthens
regulatory adherence, and builds customer loyalty.
At DigiPay.Guru, ERA is embedded into our remittance solutions, enabling you to scale
efficiently, reduce errors, and meet global standards.
Implement ERA today and make every cross-border transfer transparent, reliable, and why
wait? The future of payments in Nigeria is prepaid.

This content is originally posted on - Electronic Remittance Advice (ERA) used in
Cross-Border Payments

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