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SWIFT Pilots gpi Initiative for Low Value Cross-border Payments

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Brussels – SWIFT is piloting a low value cross-border payments service targeted at SMEs and consumers. Currently it has over 20 banks on board with the initiative which leverages gpi and the high-speed rails that are already being used for high-value payments.

SWIFT says the new initiative will enable SMEs and consumers to benefit from predictable payments, with costs and processing times known upfront, and real-time status available to both originator and beneficiary customers via their financial institutions.

Low value cross-border payments builds on SWIFT’s ‘next generation’ strategy, announced recently, that aims to offer instant and frictionless transactions for all “anywhere in the world”.

According to SWIFT, the key pillars underpinning the new low value cross-border payments service include:

  • Easy to use: The service will have a simple and streamlined user experience with security ingrained at every level.
  • Fast payments: Tighter service levels between banks will increase speed. A single payment format will increase straight through processing, while existing services such as pre-validation will remove frictions that cause delays.
  • Competitive prices: Predictable and competitive processing fees are agreed bilaterally between financial institutions, enabling them to provide their end customers with upfront transparency on fees.
  • Secure: Payments will be exchanged through the secure SWIFT network and cleared through best-in-class channels for international payments.

Client expectations

Carlo Palmers, Head of Payments Solutions at SWIFT, explained the rationale for the new service to TMI. In recent years, he says, the domestic payment experience for SMEs and consumers has significantly improved, “and expectations among these groups have heightened to the point where they want fast and transparent payments with a seamless user experience”.

At the same time, he adds, SWIFT gpi transformed the high value cross-border payments experience and gained critical mass rapidly after launch in 2017. “So, it became important for us, alongside our community, to innovate on the strong foundations built by gpi to create a SME and consumer targeted solution for low value cross-border payments that meets their specific needs.”

As part of the new service, payments will be initiated directly from the end users’ bank accounts, exchanged through the secure SWIFT network and cleared through ‘best-in-class’ channels for international payments. “The goal is to provide a simple and streamlined user experience via banks, and SMEs will be able to access this data via the channels they use to interact with their bank,” says Palmers.

The first payments through the new service have already successfully exchanged between banks who are helping to develop it. These include: Bank of China, Barclays, BNP Paribas, BNY Mellon, Deutsche Bank, KEB Hana Bank, MYbank, National Australia Bank, SMBC, Standard Bank, StoneX, UniCredit and Wells Fargo. An additional seven banks will participate in a pilot phase starting at the end of October: Banca Intesa, BBVA, DNB, HSBC, Sberbank of Russia, Societe Generale and Standard Chartered.

The service is expected to be available to all gpi financial institutions in 2021.

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