SWIFT Pilots New Service for Low Value Cross-border Payments

18 Nov 2020

On 1 October 2020, SWIFT announced plans for a new service to help banks improve the experience for small and medium-sized enterprises (SMEs) and consumers who send low-value payments across borders. The service will enable these bank customers to make faster, easier, predictable and competitively priced payments all around the world.

SWIFT is working with more than 20 banks to develop the service, which builds on the strength of SWIFT gpi and the high-speed rails that have already transformed the business of high-value payments. This new initiative will enable consumers and SMEs 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.

The new service is another building block for SWIFT’s ambitious new strategy, announced in September, to enable instant and frictionless transactions from one account to another, anywhere in the world. A key aspect of that strategy is helping financial institutions strengthen their position in the B2B space, whilst expanding their capabilities in fast growing segments such as SME and consumer payments.

David Watson, Chief Strategy Officer at SWIFT, said: “The success of SWIFT gpi, which is used by thousands of banks and carries billions of payments globally, enables ever-faster transaction processing times and transparency. And it now provides us with the opportunity to transform the experience in the SME and consumer payment markets. We expect that our new gpi initiative for low value cross-border payments will similarly have widespread adoption and help us deliver our vision of making payments brilliantly simple for everyone.”

Key pillars underpinning the new low-value cross border 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.

In September, the first payments through the new service were successfully exchanged between banks who are helping to develop it. These banks represent a global geographical spread and 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.

Lucy Hawley, Head of CBFX & Multicurrency Payments at Barclays, said: “Barclays is excited to have been involved in the development of SWIFT’s initiative for low-value cross-border payments, a truly collaborative effort across the industry that builds on the success of SWIFT gpi. Customer needs and expectations are changing as the world is becoming increasingly digital and instant, and cross-border payments are no exception to this. Customers want to know upfront how much their beneficiary will receive and when they will be credited, while still feeling confident that their payment will be made seamlessly and securely, direct from their bank account. This is exactly what we have achieved, a service for low-value cross-border payments that is transparent, predictable, frictionless and simple so that customers can focus on running their business or securing their holiday, not how they pay for it.”

Marc Recker, Global Head of Clearing Products, Cash Management, Deutsche Bank, said: “Over the past three years, the banking community, together with SWIFT, has completely transformed the high-value cross-border payments landscape as a result of gpi. With corporates now profiting from improved cost-transparency, speed of execution and predictability of their payments, the plausible next step is to enable SMEs and consumers to reap similar benefits for their lower value end-to-end cross-border payments”.

Shirish Wadivkar, Global Head, Correspondent Banking Products, Standard Chartered, said: “Massive shifts in payments experience have been delivered via SWIFT gpi. With this new initiative, we will drive the benefits of gpi even further. With simplicity as our goal, we aim to deliver a better experience than close-loop cross-border payments systems can through an open gpi ecosystem.”

Joanne Strobel, Head of Technical Solutions and Network Management for Wells Fargo’s CIB Global Payment Services, said: “Leveraging the success of SWIFT gpi as a foundation to transform the cross border payment experience, SWIFT’s initiative for low-value cross-border payments provides upfront predictability for retail and small to medium sized business payments in an open network with global reach. Wells Fargo is pleased to be one of the first US banks to pilot this controlled and transparent payment solution and look forward to how it will transform and simplify the global payment experience.”

SWIFT is a global member-owned cooperative and the world’s leading provider of secure financial messaging services.

We provide our community with a platform for messaging, standards for communicating and we offer products and services to facilitate access and integration; identification, analysis and financial crime compliance.

Our messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories, enabling them to communicate securely and exchange standardised financial messages in a reliable way.

As their trusted provider, we facilitate global and local financial flows, support trade and commerce all around the world; we relentlessly pursue operational excellence and continually seek ways to lower costs, reduce risks and eliminate operational inefficiencies.

Headquartered in Belgium, SWIFT’s international governance and oversight reinforces the neutral, global character of its cooperative structure. SWIFT’s global office network ensures an active presence in all the major financial centres.

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