Cross-border payments destined for Europe can now reach beneficiaries in seconds through connection to instant domestic payment systems, with full transparency and end-to-end tracking powered by Swift.
The European Payment Council’s One-Leg-Out Instant Credit Transfer scheme (OCT Inst), enables payments to and from Europe to be processed 24 hours a day, seven days a week. The go-live follows on from a successful proof of concept earlier this year in which Swift collaborated with Iberpay, the European payment system; Spanish banks BBVA, CaixaBank and Santander; and commercial banks from Australasia (ANZ and the National Australia Bank), Brazil (Itaú Unibanco) and the UK (Lloyds Banking Group), with dozens of international payments successfully reaching Spanish accounts within seconds.
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Interlinking market infrastructures in this way is a key method by which to achieve the G20’s goals for cross-border payments around speed, transparency, cost and access. Swift announced earlier this year that 89% of payments on its network reached the end bank within an hour. The G20 is targeting 75% of cross-border payments to be credited with the beneficiary within an hour by 2027.
“OCT Inst scheme is a positive step for Europe”
OCT Inst is seen by financial institutions as an opportunity to leverage the benefits of domestic instant payment systems globally, while enabling outgoing flows and using existing rails.
Marianne Demarchi, Chief Executive of Swift in Europe, said: “Interoperability is at the heart of everything we are doing at Swift to achieve our strategy of instant and frictionless payments for all, and it will be key to achieving the G20’s goals for cross-border payments. The EPC’s OCT Inst scheme is a positive step for Europe that will enhance the user experience for payers in Europe, but also all around the world.”
Swift is closely monitoring and engaging with other interlinking initiatives and considering how they could take advantage of Swift’s solutions. For instance, forthcoming European legislation for instant payments directs payment service providers to offer instant payments at the same price as traditional payments, while also mandating them to check beneficiary details before a payment is initiated. Connecting domestic Confirmation of Payee schemes, which are effective in tackling instant payment fraud, with Swift Payment Pre-validation, will enable institutions to comply with this legislation by checking beneficiary details across the Eurozone without needing to reinvest in a new product.
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