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Global payments: borderless transparency
Executive Education / 19 February, 2020
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Annette Blanks Schwerpunkte liegen darin, bankfachliche Themen für unterschiedliche Zielgruppen praxisnah zu konzipieren und in adäquate Lernformen und Trainingseinheiten umzusetzen, wie z. B. Zertifikatsstudiengänge, Seminare oder Blended Learning-Konzepte.

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The introduction of the Single Euro Payments Area (SEPA) delivered significant benefits for pan-European payments denominated in euros. Furthermore, the arrival of real-time payments (via the SEPA instant payments scheme) cut payment processing times from several days to just a few seconds. Only global payment transactions were still made “in the traditional way”, with speed and transparency appearing to be a distant dream. To find out if your payment had been made or delayed, you had to find plenty of time in your schedule.

Innovation: SWIFT global payments

With the introduction of the Global Payments Innovation (gpi) initiative, SWIFT has set a new milestone in international payment transactions, offering customers the clarity they have been longing for. Over time, the initiative evolved into an aggressive effort to innovate the performance of global payments generally. Speed, transparent charges and “same-day use of funds” are just a few of the benefits associated with this development. Corporate customers in particular will undoubtedly benefit from the virtually “borderless” transparency of customer payments via the SWIFT network.

Real-time information for customers initiating transactions

Now SWIFT is going one step further. As from November 2020 – more specifically, to coincide with the launch of the annual SWIFT Standards Release –, all banks connected to the SWIFT network will be required to provide SWIFT with confirmation of the receipt and/or processing of customer payments. This represents a major step towards payment tracking via gpi. Banks will also provide details of credited or forwarded customer payments to the SWIFT network; this data will then be entered into the latter’s central “tracking module”.

Upon request, this data will then be made available to corporate clients for their own monitoring purposes and/or so they can use the information in their own treasury systems.

Next steps

But that’s not all. In the future, experience gained from handling the first national/regional real-time payments could also be applied to global payment transactions. Combining gpi payments with instant payments is both conceivable and feasible. Instant payment infrastructures already exist in more than 50 countries and in a wide variety of global regions – a fact that gave rise to the idea of using these structures to process global payments in the first place. Preliminary tests between Australia and Singapore, for example, have already been successful. And the Eurosystem’s real-time clearing mechanism, TARGET Instant Payment Settlement (TIPS), has also been a major step forward. It appears that the time when it took several days to process international payments may soon be over. SWIFT reports that customers using the gpi initiative are already credited with 50 percent of all gpi payments within 30 minutes and 40 percent of gpi payments within five minutes.

The obligatory introduction of universal confirmations in November will conclude a new stage in the transformation of international payment transactions. SWIFT itself describes the success of this negotiation as “completing the last leg of the payments journey”.

Our Certified Payment Professional certification course focuses on international payment transactions, specific characteristics of foreign-currency payments, and existing options for processing payments over the SWIFT network, as well as opportunities associated with SWIFT global payments.

If you would like to discuss the course, as well as English-language and in-house options, please don’t hesitate to contact us!