A payment issued in error can be cancelled. Canceling a payment indicates that a payment has not been received. For example, a payment may be cancelled if a participant reports that a check has been lost in the mail. A payment is cancelled at the payment instruction level. When a payment instruction is cancelled, the status of the payment instruction changes from "issued" to "cancelled". All of the instruction line items within the payment instruction are also cancelled and their status changes from "processed" to "cancelled".
A payment may also be cancelled because the bank account has been closed or an error in instrument details may require the cancellation of the payment. When a payment is cancelled, the reason for canceling the payment is recorded. On cancellation, the payment instruction is negated rather than deleted from the system. This is for accountability and traceability purposes. A new reversal instruction is created to cancel out the amount of the payment instruction. A reversal instruction line item is also created for every instruction line item that was rolled up into the payment instruction.
Any payment that has been cancelled can be reissued to the original nominee or to an alternative nominee. For example, a check payment that has been lost can be reissued to the original nominee. Payments can be reissued using any of the nominee's active delivery patterns. For example, an original payment issued monthly by check can be reissued daily by cash.
When a payment is reissued, new payment instruction and payment line items are created. The cancelled payment instruction and its instruction line items have a status of "cancelled". The new payment instruction has a status of "issued", and the new payment instruction line items have a status of "processed". A payment can be reissued during the cancellation process or after the payment instruction has been cancelled.