Purpose code
A four-letter code in ISO 20022 payments that says what the money is for: salary, pension, tax or a supplier invoice.
The codes come from an external code list maintained by the ISO 20022 Registration Authority and updated several times a year: SALA for salary, PENS for pension, TAXS for tax, SUPP for a supplier payment. Alongside it sits a category purpose, CtgyPurp, aimed at the banks and able to steer how the payment is processed, whereas the purpose code is mostly information for the beneficiary and the authorities.
Some countries make it mandatory. India requires a purpose on inbound foreign payments for its balance-of-payments statistics, and compliance teams use the code as one signal in money-laundering checks. The weakness is obvious: the payer picks the code and nobody verifies it. A payment marked as salary is salary until someone looks.