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SWIFT Targets Treasury with New Payments Initiative

  • By Andrew Deichler
  • Published: 12/10/2015
cborder1SWIFT is targeting corporate treasurers with a new initiative to improve the speed, transparency and predictability of cross-border payments. Designed in collaboration with financial institutions, the new service will enable corporates to receive enhanced B2B payments directly from their banks.

With so many new players entering the payments market, SWIFT and its participating banks are hoping that the new initiative gives the correspondent banking model a shot in the arm by improving the customer experience. Finextra noted that blockchain proponents like Ripple are cutting out the “middle man” with frictionless payment networks.

Wim Raymaekers, head of banking markets for SWIFT, told AFP that the initiative came about largely due to the demands of banks’ corporate clients. “We had an industry session at Sibos—it was the second most attended session—and what we heard from our banks was, ‘We have to show our corporate customers that we can enhance their experience in making cross-border payments.’ Already there are quite a few banks that have shown interest in the initiative.”

According the Raymaekers, the service was “designed with the corporate treasurer in mind.” He explained that SWIFT ultimately plans to link the service with its SWIFT for Corporates initiative. “We have international treasurers using SWIFT and they’re looking for more visibility into their accounts,” he said. “So this is a really natural complement for the corporate treasurer.”

Both SWIFT and a number of banks have agreed on several rules for the service.

Same-day use of funds. Payments that are transferred across borders will appear in the seller’s accounts, same-day. “So if you make a payment to Japan when they’re sleeping, but when they wake up tomorrow, your payment will be there on the account of the seller,” said Raymaekers.

Transparency and predictability of fees. There will be no more hidden fees; no more deductions that treasurers don’t know about, Raymaekers explained. Such transparency should drive banks to be more competitive and ultimately lower pricing for their corporate clients.

End-to-end payments tracking. “What banks agreed to was to say, when you credit the seller, you send back a confirmation to the buyer. So there are no more disputes between the buyer and the seller. All that frustration—we’re just going to take that out by giving confirmation to the buyer that the seller has been paid.”

The transfer of rich payment information. Lastly, SWIFT will make sure that the remittance data is presented, unaltered, to the seller. This is something that many corporate treasurers will be glad to hear; Raymaekers noted that many practitioners he’s spoke with want to send and exchange megabytes of remittance data.

“This is a smart way of enhancing existing payments infrastructure,” said Magnus Carlsson, AFP’s manager of treasury and payments. “By ‘tweaking’ their systems, SWIFT can offer faster availability of funds for the end-user.”

Carlsson added that a great benefit to enhancing legacy systems like this is that it most likely won't require any significant internal changes for corporates.

Raymaekers noted that many banks have come to understand that they need to offer better services to their corporate clients if they want to keep them in today’s fast-paced market. That means collaborating with each other.

The new initiative is slated to launch early next year, and SWIFT hopes that corporates will get on board quickly. “We want to prove, by Sibos next year, that we actually can improve the corporate experience,” Raymaekers said. “The initiative is really about the corporate treasurer experience.”

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