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What Is a Payment Purpose?
Let’s start with the basics — what is a payment purpose? In banking terms, it can be explained as follows:
“The payment purpose is one of the mandatory details included when processing a financial transaction.”
For card-to-card transfers, this field is optional. But for IBAN transfers — especially from one bank account to another — it’s required. You've likely seen it before: it’s the text field you can fill in when sending money to family, friends, or business partners. It’s essential for a successful transaction because it briefly and clearly explains who the money is for and why you’re sending it. Just as parcels need labels with sender and recipient information, payments — especially business-related ones — need a payment purpose. Typical examples include “payment for goods/services,” “charitable donation,” etc.
How to Fill in the Payment Purpose Correctly
If those examples made you feel confident, we’re here to say — that’s just the tip of the iceberg. The speed and accuracy of the payment depends on how well you complete this field. Follow these recommendations:
- Include full names of both sender and recipient;
- Indicate the date of the transaction;
- Clearly state the payment purpose. Example: “Payment for consulting services per contract No.13 dated 12.03.2025” or “Utility bill payment for address…”;
- Add the order or contract number, if available, to link the payment with a specific transaction;
- Use standard abbreviations and terminology to avoid misunderstandings.
For everyday transfers, a free-form message is usually fine. But there are specific types of payments — like taxes or state contributions — that require strict formatting. Each tax, fee, or unified contribution must be paid with a separate payment order and code. Let’s look at how to properly fill in the payment purpose in those cases.
Payment Purpose for Taxes and Government Fees
It’s not enough to know what a payment purpose is — you need to format it correctly. While individuals can write something casual like “Birthday gift” or “Loan repayment,” sole proprietors (FOPs) must be precise to avoid issues with tax authorities (e.g., “Income from business activity for March 2025”).
Also worth noting is the Order No. 148 of the Ministry of Finance of Ukraine dated 22.03.2023, which introduced major changes. Since July 1, 2023, new rules apply to filling out the “Payment Purpose” field. Now, each tax, fee, or contribution must be paid separately using a dedicated payment instruction. The new standardized format includes two mandatory components:
- Payment Type Code — selected from an official list approved by the Ministry of Finance;
- Additional Information — describes the nature of the payment and reporting period, e.g., “Profit tax for Q1 2025.”
You can find the full list of codes in the official order. Below are some of the most common ones:
Example of correct formatting:
What NOT to Include in the Payment Purpose
Now that you know what to include, let’s cover what to avoid. Including the following may delay or cancel the transfer:
- Personal data not relevant to the payment — like email or phone number;
- Slang or profanity — payment systems may flag and reject these terms;
- Unnecessary info or promotional content — can confuse or complicate processing.
Accurately completing the payment purpose field is essential for secure and efficient transactions — don’t skip it.
Benefits of Using GlobusPlus for Transfers
Overwhelmed by all the details? Here’s the good news — with GlobusPlus, money transfers and entering payment purposes are simple and safe. You can send money online in seconds, from anywhere. All you need is your smartphone and the GlobusPlus app. With our mobile banking, you get:
- Ease and simplicity — no long forms or bank visits, just a few taps in the app;
- Flexibility — easily change the amount or edit the payment purpose without extra hassle;
- Full control — all transactions are saved, so you can view history or download statements anytime;
- Accurate formatting — easily enter or update purpose details to ensure fast, correct delivery;
- Security — every transaction is securely protected.
The payment purpose field is more than just a blank space. It’s critical information that affects the speed and accuracy of your transfer. A vague or incorrect entry can delay or even cancel a transaction. To avoid errors, remember the three golden rules: write clearly, double-check, and use GlobusPlus. Our app helps you stay in control — and always in the plus 🧡
