The new payment pre-validation service was developed in collaboration with financial institutions. Credit: © 2021 SWIFT.

SWIFT has introduced a new payment pre-validation service for banks in a bid to reduce delays in cross-border payments.

The new service will enable the financial institutions to verify payee account details before an international payment is made. The process will reduce payment failures or delays that occur due to incorrect beneficiary information.

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Under the payment pre-validation procedure, the sending bank will confirm the account details with the receiving bank using an API. This will help in identifying any discrepancy up front expediting rectification.

SWIFT chief product officer Stephen Gilderdale said: “SWIFT’s strategy to enable fast and frictionless payments takes a major step forward with the launch of this service.

“Payment Pre-validation will bring end-to-end efficiency, enabling our customers to provide better, faster and new services to their own end clients.”

SWIFT developed the new service in collaboration with financial institutions. The financial cooperative will continue to further develop the service to include additional checking capabilities.

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Several global banks have already indicated their intention to use the payment pre-validation service.

HSBC Payments Product Management global head Thomas Halpin said: “Pre-validation is an important step in helping corporates to make simpler, faster and more secure cross-border payments.

“This feature will ensure customers can send payments in confidence, and the increased security brings benefits not just for customers but for the entire payments community.”

Headquartered in Belgium, SWIFT provides a network that enables financial institutions to exchange messages. The cooperative’s messaging platform, products and services connect more than 11,000 entities globally.

Earlier this year, SWIFT established a financial gateway joint venture (JV) with subsidiaries of the People’s Bank of China (PBoC).