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Saturday, February 24, 2024


Speed is of the essence in cross-border transactions and the SWIFT/ACI #PaymentsforBreakfast Roadshow shows SWIFT gpi pulling ahead of the race

The first meal of the day is typically spent over the morning post in the comfort of one’s home, but on nine dates in nine cities this year, groups of experts from banks and government bodies have been sharing it with two fintechs at the 2019 SWIFT & ACI Worldwide Partnership Roadshows.

At just under two hours, #PaymentsforBreakfast conferences are tailored to quickly assess the monetisation potential of new propositions as well as latest projects in domestic and cross-border payment processing through a combination of panel and open discussions. The publishers of The Fintech Magazine and 80 attendees joined SWIFT in a private suite at the St Paul’s Grange Hotel to assist the London edition, which was co-hosted with ACI Worldwide, the scheme’s first accredited SWIFT gpi vendor.

The evolving payments processing marketplace Characterised by deep-rooted relationships between corporate treasurers, the rarefied quality of the payment processing marketplace has largely protected it from fintech or other competition. But the pressure for change seen across the financial sector has begun to build there both internally – with the list of services necessary to remain a relevant player unremittingly lengthening – and externally, due to the prolonged period of low economic growth, which has weakened and fragmented global market coverage, heralding the urgent need for a new business model for servicing international trade networks.

Pre-empting this technological squeeze, SWIFT designed and rolled out a new service in early 2017, SWIFT gpi – the global payments innovation. SWIFT gpi is the biggest change in cross-border payments over the last
30 years and has dramatically improved the customer experience by increasing the speed, transparency and end-to-end tracking of payments.

It offers three key features: a tracker, which allows for transparent, Amazon-like tracking of payments from start to finish; a directory, which provides a complete list of gpi member banks and enables members to apply apt payment routing methods, and an observer, which monitors gpi members’ adherence to new service level agreements to enhance cross-border payments.
In addition to providing transactions solutions across the globe since 1974, ACI Worldwide has been a key partner for SWIFT, and is now delivering the connectivity and processing power required for gpi to evolve from a suite of basic services to the modern ones available today. ACI Worldwide became an accredited gpi vendor in 2019 and has launched its own suite of gpi solutions, including ACI Real-Time Payments, which offers full access to Swift gpi and its Swift Data Service; ACI Swift gpi Connect, which is a flexible stand-alone, wrap-around solution that works with existing back office systems; and ACI Swift Data Service, which creates direct access to the SWIFT gpi data tracker central database to pull or push all data related to inbound and outbound gpi transactions. The data tracker also links all charges and statutes of every message, including confirmation data, payments status and foreign exchange and fee information, to give clients an end-to-end view.

What was on the menu?

With Stanley Wachs (global head of bank engagement, SWIFT), Craig Ramsey (head of real-time payments, ACI Worldwide) and Tony Craddock (director general of the Emerging Payments Association) on the panel, the London Breakfast Conference kicked off with a heavy focus on gpi’s rapid adoption rate. Stanley Wachs said: “More than $40trillion was sent via SWIFT gpi in 2018, a 270 per cent year-on-year increase; $100billion is being sent every day now via gpi and, as we speak, transactions are happening over 1,200 country corridors. We are proud to announce that more than 55 per cent of SWIFT’s entire cross-border payments traffic is being sent on gpi, cementing the service as the true new standard for bank cross-border payments. “Speed, certainty and transparency were our greatest ambitions from the beginning, and we’ve succeeded in creating that value for members here – especially with speed. On average, 40 per cent of SWIFT gpi payments are credited to end beneficiaries within five minutes; 50 per cent within 30 minutes, 75 per cent within six hours and almost 100 per cent within 24 hours. “Banks have also seen a significant reduction in the number of payment enquiries and quicker investigations handling.

Overall, the traction gained from members has been promising, and we are now aiming to bring the headiest benefits of gpi – speed, certainty and transparency – to the entire SWIFT community.” Craig Ramsey emphasised that the improvements had been made possible through collaboration. “Whether it’s the initiation, the acquisition, the processing of a transaction, including all of the interaction points that the bank might have or, indeed, the clearing and settlement connectivity to actually make sure the payment reaches the beneficiary, collaboration within the sector is key to success.

“SWIFT gpi has been gaining terrific traction with financial institutions all around the world.” The level of industry progress in terms of transparency and speed has certainly spelled a new era of business for gpi members, but the panel unanimously underlined that areas in serious need of improvement remained. For example, reports show that 60 per cent of the world’s cross-border payments still contain errors. Additionally, the momentum created by the network of 3,500 banks and 460-plus banking groups using gpi has created pressure for non-gpi adhering corporations to adopt it quickly or risk being left behind. Ramsey said both organisations understood that adoption isn’t as easy as just signing on the dotting line. “Banks have to overcome some hurdles before being able to make a decision, no matter how cost effective or necessary it is.

ACI’s suite is structured to enable a bank to bring its existing back-office systems onto gpi painlessly and in less time than it would take for them to rebuild their internal systems – whether they already use an ACI payment engine or not. “Acceptance will work itself out as corporates move to leverage the infrastructures and mechanisms that
are emerging, or already in place, across Europe. We have every faith that the concerned industries will all evolve without fatalities. Our focus is to help them do it fast.”

After a volley of questions from attendees, which underlined the problems institutions are facing when it comes to satisfying customer needs, the conference disbanded, clear in the understanding that 2019 is the payment processing sector’s handover period from the 20th Century to the digital 21st. Established corporations and banks continue to have the upper hand, but
for how much longer will largely depend on their ability to climb aboard.

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