Faster and more efficient cross-border payments are a top priority for treasurers for multinational corporations. A new system by SWIFT may help them achieve that goal.
SWIFT announced Thursday that nearly 100 global transaction banks, including Bank of China, Danske Bank, DBS Bank, ING, Nordea and Standard Chartered, are actively using its global payments innovation (gpi) service, which opened for payments in January. SWIFT said it expects “numerous banks” to follow in the coming months.
“We are delighted that SWIFT gpi is now live and is already enhancing the cross-border payments experience for corporate treasurers,” said Christian Sarafidis, chief marketing officer for SWIFT. “A year ago the global financial community pledged to dramatically improve the cross-border payments experience, and today marks a major milestone in delivering on that promise. It further demonstrates the ability of SWIFT and the financial industry to collaborate, innovate and rapidly introduce new solutions.
SWIFT says that its gpi service allows corporate treasurers’ banks to provide them with faster, more transparent and traceable cross-border payments. A special tracking feature provides treasurers with a real-time, end-to-end view of their transactions, which includes confirmations when payments are credited to recipients’ accounts. Furthermore, gpi’s transparency ensures that remittance information is transferred unaltered to recipients—which will be music to the ears of many treasurers.
Magnus Carlsson, AFP’s manager of treasury and payments, called the gpi “a very positive development,” particularly because SWIFT developed the service by using and enhancing existing infrastructure. “SWIFT has addressed several of the pain points corporates have had with cross-border payments,” he said. “Changes to existing corporate payments infrastructures should be very limited, if any. So hopefully, corporates won’t need to make any major investments to benefit from smoother cross-border payments.”
However, Carlsson cautioned that banks themselves could be the one thing that keeps this from being too much of a sweet deal for corporates—especially if it proves incredibly popular. “One thing to still keep an eye on is the cost banks are going to charge for the service,” he said.
As for the next phase of gpi, it will include “additional digital services to further transform the cross-border payment experience, such as a rich payment data service,” SWIFT said. Separately, SWIFT gpi is also exploring distributed ledger (blockchain) technology for real-time nostro account reconciliation.