Fifteen banks have lined up to be part of SWIFT’s latest pilot for a gpi payments service that is focusing on enabling speedy identification and eliminating errors and omissions in payment messages. Is this set to make payments swifter than ever? Patrick Brusnahan writes
This move is the first step in SWIFT’s introduction of its ambitious gpi validation programme. Overall, the goal is to build the foundation of an integrated and interactive service. It is all about improving efficiencies in payments. If a success, the technology will be integrated with all 10,000 banks across the SWIFT network.
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When integrated with gpi payments, the service will deliver real-time dynamic bank-to-bank interaction with APIs. This is to improve the predictability and efficiency of international payments. It will be complemented with post-payment investigation down the line. There will also be a reconciliation service that will allow for speedy resolution of all remaining payment factors, usually brought on by compliance or regulatory requirements.
Marc Delbaere, head of corporates and trade at SWIFT, is optimistic about the trial and believes it can solve many problems. Speaking to EPI, he says: “More than 50% of SWIFT gpi payments are credited to the end beneficiary in less than 30 minutes, and many arrive in just a few seconds. However, a sizeable number of the remaining messages are delayed due to errors in the payment data – such as incorrect or missing beneficiary information and insufficient regulatory data.”
Delbaere continues: “The pre-validation service will allow customers to detect and resolve errors that delay payment messages before they are despatched. Using secure APIs, the new gpi capability will ‘pre-validate’ messages, identifying and flagging potential issues ahead of time – reducing delays, rejections and the return of incorrect payment messages.
“Correcting these preventable errors and omissions before the initial instructions are sent will result in a far fewer investigations and rejections, and a more efficient payments experience.”
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Working with banks
The pilot comes as SWIFT gpi has rapidly grown; currently, more than half of all SWIFT’s cross-border payment volumes go through SWIFT gpi. Working with banks was crucial if the trials were to be a success.
Delbaere says: “The initial phase of the pilot was about co-creation, so kept the number of institutions manageable. We approached all the largest transaction banks, as well as a couple of smaller institutions to get a more representative set of requirements. We will open the implementation to other gpi banks through 2019.”
Christof Hofmann MD and global head of payments and collection products at Deutsche Bank, says: “We believe the gpi pre-validation service will add significant value to our clients, increasing the overall gpi client experience. Beneficiary account validation addresses an important pain-point in cross-border payments; it will help increase STP ratios while reducing fraud and exception handling.
Manish Kohli, global head of payments and receivables at Citi Treasury and Trade Solutions, says: “The gpi pre-validation pilot is a significant step forward for the payments industry in building a platform on which banks can interact with each other in real time, both pre-transaction and posttransaction.
“It demonstrates how banks can leverage SWIFT gpi to continue to transform cross border payments. This service is an enabler of our goal to provide real-time ubiquitous cross border payments by allowing banks and our clients to rectify any issues at the point of origination, achieving seamless end-to-end fulfilment along the payments delivery chain.”
So how long will this last? And how can it be proved to be a success? Delbaere concludes: “Pilot banks will start implementing the pre-validation service in early 2019. While still in pilot-mode, the banks will use live data – which will provide them with immediate benefits. The pilot will continue throughout 2019, and will be open to any gpi bank that would like to participate.”
