SWIFT Ups Competition with Crypto, Launches ‘Fast, Transparent Payments’ Service
Global banking payments network SWIFT seems to be aiming to build itself as a stronger competition to cryptocurrencies – it has just launched a new service which they say allows businesses and consumers to send payments quickly, securely, and transparently directly from bank accounts.
SWIFT Go enables financial institutions to offer a payments experience for low-value transactions often initiated by small- and medium-sized enterprises (SMEs) to pay suppliers overseas, as well as by consumers who are sending money to friends and family internationally, per the press release.
The network stated that the service already encompasses seven global banks that together handle 33 million low-value cross-border payments per year: BBVA, Bank of New York Mellon, DNB, MYBank, Sberbank, Société Générale, and UniCredit.
The service uses “tighter service level agreements” between institutions and pre-validation of data, which then enables banks to provide end customers upfront visibility on processing times and costs, they claim.
The service rests on five pillars:
- increased speed via tighter service levels between banks; increased straight-through processing via single payment format, while services such as pre-validation remove frictions that cause delays;
- predictability, as the payment sender and receiver can track the status in real-time, while the amount, time, fees, and foreign exchange (FX) rate are known in advance;
- ease of use, with data requirements known upfront;
- processing fees being agreed between financial institutions upfront;
- security of the SWIFT network.
The SWIFT’s network connects more than 11,000 institutions, and 4 billion accounts across 200 countries worldwide. The new service, which builds on the SWIFT gpi (global payments innovation) system, will “strengthen the capabilities of banks to serve their customers in the high-growth small business and consumer payments segments.”
“SWIFT Go is a further step towards achieving our vision of enabling anybody, anywhere, to send money instantly and securely around the world,” said Stephen Gilderdale, Chief Product Officer at SWIFT, adding that the new service is a direct response to the needs of small businesses and consumers.
Isabel Schmidt, Head of Direct Clearing and Asset Account Services Products at the Bank of New York Mellon, said that consumers and small businesses have been running into a number of issues for years now when transacting international payments, including opaque costs and lack of certainty on how quickly funds are delivered to the final beneficiary, while Raouf Soussi, Head of Enterprise Payments Strategy of Client Solutions at BBVA said that the bank recognizes “the potential of this solution to revolutionize the way SMEs and consumers move money around the world.”
As reported in February this year, SWIFT and the Bank for International Settlements (BIS)’ Innovation Hub (BISIH) teamed up to host a hackathon to highlight the potential of the new ISO 20022 payments standard and application programming interfaces (APIs) to make cross-border payments “faster, cheaper and more transparent.”