In the context of standard bank transactions, 'My Reference' and 'Their Reference' are essential fields used to clearly identify and track payments for both the payer and the recipient. These references help ensure that funds are correctly attributed and easily reconciled on bank statements.
Understanding Payment References
When making a payment to a beneficiary through your bank's online or mobile platform, you will typically encounter fields to input reference details. These references serve as unique identifiers for the transaction.
My Reference
- Definition: As per banking guidelines, 'My reference' is the specific reference that you, as the payer, would like to see appear on your own bank statement when you pay a particular beneficiary.
- Purpose:
- Personal Tracking: It allows you to quickly identify the purpose of a payment on your statement. For example, if you pay rent, you might use "Rent [Month]" as your reference.
- Record Keeping: Helps with personal or business accounting, making it easier to match transactions with invoices or expenses.
- Practical Example: If you are paying your electricity bill, you might enter "Electricity Bill - [Your Account Number]" as 'My Reference'. This will show up on your statement, confirming what the payment was for.
Their Reference
- Definition: 'Their reference' is the reference required by the beneficiary (the person or entity you are paying) to identify your payment. This is crucial for them to allocate your payment correctly to their account or invoice.
- Source of Information: You can often find this reference in your VAF agreement number, which is typically located in the statement details section on your monthly statement from the beneficiary.
- Purpose:
- Beneficiary Identification: Ensures the recipient can easily match your payment to their records, such as an invoice, account, or agreement.
- Efficient Processing: Helps the beneficiary's automated systems process your payment without manual intervention or delays.
- Practical Example: When paying a loan or a service provider, they will usually provide a unique reference number (e.g., your account number with them, an invoice number, or a VAF agreement number). Entering this accurately ensures your payment is credited to the correct account on their end.
Key Differences and Importance
The table below summarizes the core distinctions between 'My Reference' and 'Their Reference':
| Feature | My Reference | Their Reference |
|---|---|---|
| Payer's View | Appears on your bank statement. | Not typically visible on your statement as the primary identifier. |
| Recipient's View | Not relevant to the recipient's reconciliation. | Essential for the recipient to identify your payment. |
| Purpose | For your tracking and record-keeping. | For the beneficiary's tracking and allocation of funds. |
| Content | Chosen by you (e.g., "Rent," "Invoice 123"). | Provided by the beneficiary (e.g., VAF agreement number, account number). |
| Location | Entered on the "Beneficiary Details" screen when initiating payment. | Found on beneficiary's statements, invoices, or agreements (e.g., VAF agreement number in statement details). |
Why are both important?
Using both references correctly streamlines the payment process for both parties. 'My Reference' provides clarity for your own financial management, while 'Their Reference' ensures the recipient efficiently processes your payment, preventing delays or misallocations. Always ensure you provide the correct 'Their Reference' as specified by the beneficiary to avoid payment issues.
