Confirmations bring peace of mind to cross-border payments
Swift’s global payments initiative (gpi) has rapidly become the new standard in cross-border payments. Today, nearly 60% of Swift cross-border payments are sent via gpi. There are more than 3,500 financial institutions that have committed to gpi who are processing the equivalent of 300 billion dollars every day.
The service was created to enable banks to meet the growing demand for fast, trackable and transparent services. Since gpi’s inception in 2017, Swift has continued to innovate and enhance the cross-border payments experience. The next step, says Swift, is through the new universal confirmations initiative.
Financial institutions currently sending payments through gpi benefit from tracking and confirmations, allowing them clear sight of where their payments are and when they’ve reached the intended recipient.
Universal confirmations will extend these benefits to all financial institutions on the Swift network, including non-gpi banks. To make this possible, all Swift-enabled institutions will be required to confirm payments once they’ve been credited to the beneficiary’s account. Swift has set a time-frame in which to achieve this as a community: the end of November 2020.
“It’s similar to when you send a package via a delivery company,” says Fabien Depasse, head of Swift gpi customer success. “These days you don’t just expect to be able to track your package’s journey, you also want to know that it’s arrived safely. And that’s exactly what corporates and individuals want to know about their payments.”
Swift says that this fairly simple change will have a big impact, allowing every financial institution on the Swift network to see the final status of each payment and access reliable, up-to-date tracking information.
“We know that customers aren’t just asking for this, they expect it,” Depasse says. “They want to be able to say, ‘I’ve done the trade, I want to know that the payment has arrived.’ For example, if I am a corporate and you are a supplier, you will only ships goods that I’ve purchased after receiving my payment. Confirmation is an essential element to satisfy the supplier but also, importantly, to allow corporates to build a reliable supply chain.”
Confirmations also reduce the need for manual intervention in cross-border payments. This leads to big steps forward in customer experience, and reduces costs for financial institutions, as resource that was previously used to chase payments is freed up.
Swift has been working with the software community to make sure confirmations solutions can be pre-built into existing payment applications and have designed a range of tools to help financial institutions build payment confirmations into their existing operations.
For bigger organisations, Swift will provide automated services that will be integrated into existing applications and message flows. For smaller organisations, they are developing a “basic tracker,” a light version of their full gpi tracker. This will be provided for free and will allow banks to confirm payments manually by clicking a single button.
Swift says confirmations will enable the financial industries to develop a range of digital services. “Confirmations will enable banks to innovate. For example, many banks are already making their confirmation data available via an API or similar technology. Customers can see their payment activities via internet banking or a mobile app in real-time. This allows banks to be fully transparent on payments, something which customers really appreciate,” Depasse explains.
Swift says full end-to-end payment tracking and confirmations are the foundation upon which they are developing many more innovations. Ultimately though, all Swift gpi services have the same objective at their core: making payments fast, transparent, trackable and certain.