Carlo Palmers, Head of Payments Solutions at SWIFT, chats with Eleanor Hill, Editor, TMI, reviewing the development of gpi thus far – and outlining what the future might hold.
Eleanor Hill (EH): Are you surprised by the momentum SWIFT gpi has gained in such a short timeframe?
Carlo Palmers (CP): SWIFT gpi has made tremendous progress over the past year and we have received positive feedback from customers. The value of cross-border payments transferred using SWIFT gpi nearly doubled to $77tr. and the number of live gpi payment corridors increased to more than 1,900. Furthermore, by the end of last year, nearly two-thirds (65%) of SWIFT’s cross-border payments were sent using gpi. This growth might seem remarkable, but it is a direct result of our community increasingly recognising the dramatically improved speed, certainty and overall cross-border experience gpi delivers.
Due to the success of gpi, we have extended the benefits of tracking and confirming payments to all financial institutions on the SWIFT network. Since December 2019, every financial institution on SWIFT can access our Basic Tracker and we have already seen many taking advantage of this globally.
EH: What are the biggest hurdles to greater adoption of gpi? How will these be overcome?
CP: Naturally, there is a challenge with a development on this scale in bringing our whole community of more than 11,000 customers with us. Our community consists of global transaction banks, multinational corporate groups and smaller, regional institutions. They all have different needs and capabilities, so we have to ensure that our products address specific requirements, we must explain the benefits clearly and make adoption as easy and seamless as possible.
With gpi, we have delivered on each of these requirements. It’s fast: more than 50% of gpi payments are credited to end beneficiaries within 30 minutes, 40% in under five minutes, and almost 100% of gpi payments are credited within 24 hours. It’s trackable: financial institutions and their customers can track their payment flows end-to-end and in real time. It’s transparent: financial institutions can provide their customers with visibility on processing fees, exchange rate costs and processing times, meaning all parties can manage their finances and relationships accordingly.
We made it easy to adopt by using the existing rails of SWIFT’s secure global messaging and FIN payment formats, leveraging banks’ existing back-office payment processing systems, utilising existing domestic payments systems, application programming interfaces (APIs) and a cloud-based set-up.
The choice of an evolutionary, rather than revolutionary, approach has enabled us to meet the challenge of incorporating transformative innovation into a service for our community.
EH: Are there any misconceptions around gpi you wish to address – especially among corporates?
CP: We are very pleased with the reaction from corporates. We have more than 2,000 corporate groups connected on SWIFT and there has been significant uptake among these customers.
This was boosted by the launch of gpi for corporates in 2019. Instead of having to log into many different portals for each of their banking partners to consult payments progress and details, corporates with multiple banking partners can now see all of this information directly in their own payments application. More than 50 of the world’s largest corporates have already signed up to the service, and its next iteration is being piloted now.
EH: What is the ultimate goal for gpi and when might this be achieved?
CP: Without doubt, gpi is proven, and is fast becoming ubiquitous. We will continue to build on it in 2020 and beyond as we strive to make real-time, 24/7 cross-border payments as seamless, convenient, cost-efficient and accessible as domestic payments.
A key part of this is gpi instant, a new cross-border payments service announced in 2019. It combines real-time service levels with domestic instant payments systems around the world.
Through a combination of gpi instant and domestic real-time payments networks, SWIFT, together with gpi banks, will facilitate instant international payments with up-front fee and foreign exchange transparency for senders, while also ensuring ubiquitous availability of instant cross-border payments globally.
This followed a number of successful trials in Australia, in European countries and Singapore, which saw payments settle extremely rapidly – the fastest in just 13 seconds.
Separately, we are working on a number of additions to gpi, such as the case resolution service. It’s an ‘in-flight’, cloud-based payment investigation and resolution service that enables users to quickly resolve situations where operational, regulatory or compliance information is incorrect or missing from payment instructions.